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    Poll shows most economists expect BOJ to keep the 0.50% interest rate in September

    by VT Markets
    /
    Sep 11, 2025
    A recent Reuters poll shows that 96% of economists expect the Bank of Japan (BOJ) to keep its key interest rate at 0.50% during the September meeting. Additionally, 55% foresee a rate increase to at least 0.75% in the fourth quarter, down from 63% before. The median prediction for the year-end interest rate remains at 0.75%, the same as last month’s consensus. Among those surveyed, 76% do not expect wage increases in next year’s spring negotiations to exceed this year’s 5.25% level, with the median estimate at 4.80%.

    Possibility of Rate Hike

    Even with political instability and tariff concerns, there is still a chance of a rate hike next year. However, upcoming wage negotiations could become challenging if wage growth falls short of expectations. The consensus is clear: the Bank of Japan is likely to keep its key rate at 0.50% this month. Recent government data showed that core inflation in August eased slightly to 2.9%, giving the board a strong reason to take a wait-and-see approach. This high level of certainty has led to lower short-term volatility in the yen for derivatives traders. While a rate hike to 0.75% is still the main prediction for the fourth quarter, confidence is clearly fading. This caution is heightened by ongoing trade talks between the US and Japan, where potential tariffs pose a significant challenge for our export sector. As a result, options markets are pricing in greater risks for year-end contracts.

    Warning Sign for Sustained Hiking

    A major warning sign for any ongoing rate hikes is the forecast for next spring’s wage growth, which is expected to be lower than this year’s figures. History shows us that the central bank will not take aggressive action without clear signs of a wage-price spiral, as seen during the gradual move away from negative rates in 2024. This outlook may dampen any long-term optimistic bets on the yen. Create your live VT Markets account and start trading now.

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