Sources: The Bank of Japan's December interest rate hike is almost certain, and the government will not interfere

The Bank of Japan is likely to raise interest rates in December, while the government is expected to tolerate the decision, three Japanese government sources said, according to Reuters. The sources said the BoJ appeared ready to raise its policy rate from 0.5 percent to 0.75 percent, a signal also given by Governor Kazuo Ueda in a speech on Monday. It would be the first rate hike since January this year. "If the BoJ wants to raise interest rates this month, make your own decision. That's the government's position," one of the sources said, adding that it was all but certain that the central bank would raise interest rates this month. Ueda said on Monday that the BoJ would consider the "pros and cons" of raising interest rates this month, foreshadowing a strong possibility of a rate hike at the December 18-19 meeting. The comments have left the market pricing in about an 80% chance of a December rate hike, although some market participants are watching how the government of dovish Prime Minister Takayama might react. The market's focus is likely to shift to the central bank's language on how far it will eventually raise interest rates, and Ueda remains ambiguous on the topic for now. (Jin Ten)