BNP Paribas has raised its forecast for Japan’s terminal interest rate to 2.5% from a previous projection of 2.0%.
According to Jin10, the bank’s economist Ryutaro Kono expected the Bank of Japan to maintain a gradual tightening pace, raising rates once every four to five months.
Kono said he expected the BOJ’s policy rate to reach 1.25% by the end of 2026 and 2.0% by the end of 2027, before ultimately hitting a terminal-rate ceiling of 2.5% in September 2028.
He added that because downward pressure on the yen was expected to persist, inflation could remain above the BOJ’s 2% target.
Kono also said he expected the Takaichi government to continue taking a passively tolerant stance toward future rate hikes.
BNP Paribas Raises Japan Terminal Rate Forecast To 2.5%
2026-07-03 04:40:02
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