Tokyo
Reuters
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The Bank of Japan on Friday increased its interest rates to its highest level after the 2008 global financial crisis, emphasizing that the rise in wages would keep inflation close to its 2 % target.
The decision indicates the rise in the rate for the first time since July last year, and it comes a few days after the inauguration of US President Donald Trump, which is likely to be alerted before the potential impact of a high -end tariff to global policy makers. Will keep
In its two -day meeting that ended on Friday, the BOJ increased its short -term policy rate from 0.25% to 0.5%, which Japan had not seen in 17 years. The board was formed in 8 to 1 vote with disagreement with the Tueki Nisarwara.
The widespread anticipated move indicates a commitment to permanently increase the central bank’s interest rate by 1 %, a level analyst viewed as Japan’s economy cooling or heating.
The central bank said in a statement announcing the decision, “The chances of getting the BOJ’s approach are increasing,” many firms say they continue to increase wages in this year’s annual wage negotiations. Will
The central bank said “the basic inflation is moving towards the target of 2% of the Boj,” the central bank said the financial markets were stable overall.
The BoJ has not changed its guidance on the future policy, saying that if its economic and price predictions are met, it will continue to increase interest rates. But he removed a phrase that emphasized the need to examine the dangers of overseas economies and markets.
“Their logic remains the same. They are still far from neutrality, so it is natural to make adjustments,” said Naka Strategist, the chief macro -strategist in Tokyo.
“Unless the BOJ either changes the logic of rate rise, or even increases the neutral point, which they are considering – about 1% – more for the market to further increase prices in the future. There will be no room. ”
After the decision, the yen increased by about 0.5% to $ 155.32 per dollar, while the two -year Japanese official bond (JGB) production increased by 0.705%, the highest since October 2008.
Now the focus is on the speed and time of the BoJ Governor Kazov Yoda at 0630 GMT to further increase the speed and time.
In a quarterly Outlook report, the board increased its prices forecasts to advance basic inflation on its 2 % target or more three years.
He also said that the risk of inflation scenario between the severe shortage of labor, rising rice prices and the increase in import cost from weak yin are upset.
“With regard to this year’s annual wage negotiations, the firms have expressed many views that they will constantly increase wages,” the report said.
Japan’s Union Ambrille Group chief told Reuters on Friday that the Japanese annual salaries should be more than 5.1 percent received last year as real wages continue to decline.
The board now predicted the inflation of basic consumer inflation by 2.4 % before falling 2.0 % in 2026. In the previous estimate in October, it expected inflation to reach 1.9 percent in both fiscal year 2025 and 2026.
It did not change its predictions that Japan’s economy would increase 1.1 percent in 2025 and 1.0 percent in 2026.
The report states that while the US economy is solid and financial markets are overall, the Boj should be alert to uncertainty about US policy behavior.
“Maybe an increase is expected, but for the first time in a very long time, there is no major decline in his economic approach,” said Matt Simpson, senior market analyst at the City Index in Brisbane. ” “This keeps the door open by the end of the year, the door to increase, and the rate reaches 0.75%.”
Japan’s primary consumer inflation reached 3.0 percent in December, which is the fastest annual pace in 16 months, data showed in early Friday, due to rising fuel and food items. The costs of households continue to increase.
After taking leadership in April 2023, the UEDA abolished its predecessor’s radical stimulation program in March last year and increased the short -term interest rate to 0.25% in July.
BOJ’s policy makers have repeatedly said that the central bank will continue to increase rates, if Japan progresses in achieving an era in which increasing inflation increases wages and increases consumption, thus Firms are allowed to continue to spend more.
