Skip to main content

Bank of Japan will hike policy rate in January

Following hawkish comments by BoJ Governor Ueda, we now expect the Bank to lift its policy rate for the first time in sixteen years in January. The Bank could call time on Yield Curve Control at the same time given that 10-year yields are now the highest in a decade and the Bank’s large stock of JGB holdings may keep depressing their yields. But given that bond yields were much higher still when the Bank last hiked its policy rate, we suspect the Bank will want to keep a lid on bond yields for now to prevent financial dislocation. Accordingly, we only expect the demise of Yield Curve Control by mid-2024.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access