BNP Paribas has revised its outlook for terminal interest rates in Japan, raising it to 2.50% from the previously projected 2.00%. The firm's economist Ryutaro Kono expects the Bank of Japan to maintain a gradual tightening pace of one rate increase every four to five months. The BOJ policy rate is expected to reach 1.25% by the end of 2026 and 2.00% by end-2027, with the rate ultimately hitting the 2.50% terminal ceiling in September 2028, he says. With downward pressure on the yen expected to persist, inflation will likely continue trending above the BOJ's 2% target, he says. "The Takaichi administration is expected to maintain its stance of passively tolerating interest-rate hikes moving forward." (megumi.fujikawa@wsj.com)
Dow Jones Newswires
BNP Paribas Raises Japan's Terminal Rate Outlook to 2.5% — Market Talk
BNP Paribas has revised its outlook for terminal interest rates in Japan, raising it to 2.50% from the previously projected 2.00%. The firm's economist Ryutaro Kono expects the Bank of Japan to maintain a gradual tightening pace of one rate increase every four to five months. The BOJ policy rate is…