BOJ aims to reduce bond purchases in 1-2 years, market expects interest rates to be fixed But the committee has not yet made a decision.

The BOJ aims to reduce the amount of government bond purchases over the next 1-2 years. Analysts expect the BOJ to hold interest rates, but news sources say the committee has not yet made a decision. Points out that additional factors need to be evaluated.

On July 25, 2567, Reuters news agency reported, citing news sources, that Bank of Japan There will be a monetary policy meeting next week. From 30-31 July It is expected that the committee will discuss whether the interest rate should be raised or not. and revealed plans to cut bond purchases in half over the next 1-2 years, which is a sign that Bank of Japan The intention is to phase out the massive economic stimulus package gradually.

Four sources said the decision on interest rates would depend on the board members. Bank of Japan How long do you see it taking for consumption to recover and whether inflation remains within the Bank of Japan's 4% target?

Meanwhile, economists in a Reuters poll believe that Bank of Japan Interest rates will be maintained at this meeting. And there may be interest rate changes in September. or October

The source said The interest rate decision is not yet certain. And it is difficult to make a decision because the consumption trend is still unclear. Although a majority of the committee agreed on the need to raise interest rates soon, agreement was not reached on a rate increase at this meeting. or in a meeting at the end of the year

Core inflation rose to 2.6% in June, well above the target. Bank of Japan It has been set for over 2 years. In addition, the entire country has increased basic wages at the highest rate in more than 30 years in May. These 2 issues are the main factors supporting the increase in interest rates.

However, weak consumption and falling household confidence As a result, policy makers Bank of Japan Must delay the increase in interest rates for now. And this requires a careful approach. More information will be needed to confirm whether the tax cuts and wage increases will stimulate domestic consumption as expected.

Mr. Kazuo Ueda, Governor of the BOJ said the Bank of Japan Interest rates will be raised. Only if it is certain that strong economic and wage growth will help keep inflation below the 2% target in the coming years.

This is despite the fact that prices of consumer goods have increased since the outbreak of COVID-19. But Japanese policymakers remain concerned about a prolonged period of deflation. Over the past three decades, although the Bank of Japan The ultra-loose monetary policy has been canceled but interest rates will still be held at near 0%.

The next interest rate hike is expected to be the start of a new interest rate hike cycle. Bank of Japan The interest rate will be raised gradually. to a level of approximately 0.5% to 1.5%, which may take several years

In addition, A news source revealed that The Bank of Japan is expected to gradually reduce bond purchases over a period of time. To be in line with market expectations and to avoid unexpected increases in bond yields.

refer : reuters.com

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