74% of Japanese Experts Say "BOJ Will Not Raise Interest Rates at July Meeting"

"Reducing Government Bond Purchases and Raising Interest Rates Simultaneously Is Difficult"
Impact Also from Yen Depreciation Reversal

The Bank of Japan (BOJ) is holding a two-day monetary policy meeting starting on the 30th, and 74% of Japanese bond market experts expect that interest rates will not be raised this time.

The Nihon Keizai Shimbun (Nikkei) reported that a survey conducted by financial information provider QUICK from the 23rd to the 25th among 123 bond market participants working at securities firms, insurance companies, and banks (valid respondents) found that 74% of respondents anticipated a delay in the interest rate hike.

[Image source=Reuters Yonhap News]

The BOJ has indicated that it will decide on the scale of reduction in long-term government bond purchases at this meeting.

Because of this, respondents predicted that it would be difficult for the BOJ to simultaneously reduce the scale of government bond purchases and raise interest rates.

They also cited the recent easing of the yen's depreciation trend as a factor delaying the rate hike. The yen-dollar exchange rate rose to the 161 yen level earlier this month but gradually declined. Around 3 p.m. on the day, the yen-dollar exchange rate was moving around 154.74 yen. A decline in the yen-dollar exchange rate means an appreciation of the yen.

Only 26% of respondents expected the BOJ to raise interest rates in July. They answered that since it is clear that inflation caused by yen depreciation is depressing consumption, the consumption slump is not a reason to delay the rate hike.

Overseas, there are expectations that the BOJ will raise interest rates in July. CNBC reported that ING analysts recently predicted in a report that the current 0.1% rate could be raised to a maximum of 0.15%, and Bank of America (BoA) forecasted it could be raised up to 0.25%.

Bloomberg News reported on the 23rd (local time) that a survey of 48 economists showed 29% expected a rate hike in July. However, 94% of respondents said that under risk scenarios, the BOJ could raise rates as early as July.

The Bank of Japan will announce the results of the meeting on the 31st.

This content was produced with the assistance of AI translation services.