TOKYO, March 21 — The Bank of Japan is expected to hike the interest rate in either July or October, though an October hike is considered more likely, as it would give the BOJ around half a year to evaluate the impact, Nikkei newspaper reported on Thursday.
The central bank ended eight years of negative interest rates on Tuesday, making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.
“Additional hikes are of course on the table,” a BOJ source told Nikkei.
An October hike would give the BOJ more time to evaluate how ending negative rates affects prices and the economy, the newspaper reported.
Some in BOJ also see a July rate increase as another possibility as a weak yen could raise the price of imports and increase inflation, in turn forcing the BOJ to step in, Nikkei added.
An early hike “leaves room for us to consider rolling out another increase before the end of the year,” a BOJ source told the publication. — Reuters
