Bank of Japan (BOJ) officials see little downside to delaying an interest rate hike while remaining open to a move next week, depending on data and market conditions, sources say. They believe waiting until January or beyond poses minimal risk due to limited chances of inflation overshooting.
The yen weakened against the dollar following the report, hitting 152.82 at one point before stabilizing around 152.10 on Thursday morning.
Markets are speculating whether the BOJ will raise rates in December or January after conflicting signals from officials. Governor Kazuo Ueda recently suggested hikes are “nearing,” while other reports highlighted concerns about acting too soon.
Dovish policy board member Toyoaki Nakamura has stated that he isn’t opposed to a hike but would rely on data before deciding. The BOJ will finalize its policy on Dec. 19, considering U.S. inflation data, Japan’s Tankan business survey, and the Federal Reserve’s meeting outcome.
November U.S. inflation met expectations, reinforcing predictions of another Fed rate cut next week.