Daiwa Securities forecasts Bank of Japan rate hike in December 2026
What happened
Daiwa Securities predicts the Bank of Japan will raise interest rates in December 2026, with a subsequent hike expected in April 2027. This forecast follows a policy phase shift declared by Kazuo Ueda, with the Bank of Japan's goal now being to maintain inflation at 2%. Daiwa Securities notes that oil and wage increases pose upside risk, with rates potentially peaking near 2%.
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Why it matters
The predicted quarterly pace of rate increases could place upward pressure on the front end of the Japanese Government Bond curve. Furthermore, the value of the yen is central to the forecast, as a sharp fall in the yen could accelerate the Bank of Japan's rate hike expectations.
Daiwa Securities previously analyzed the Bank of Japan's policy shift framework in June 2026.
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Who's involved
- Daiwa SecuritiesAnalyzes and forecasts the monetary policy signals and rate decisions of the Bank of Japan
- Bank of JapanThe central bank of Japan expected to implement the rate hike
- Kazuo UedaGovernor of the Bank of Japan who declared the policy phase shift
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Tokyo Stock ExchangeSpeculative
The Tokyo Stock Exchange might see increased borrowing costs and discount rates for equities due to rate hike expectations
- yenSpeculative
The yen might experience changes in its market price driven by interest rate differentials
Keep exploring
The entities involved
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Daiwa Securities
Nothing else this week.
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Bank of Japan
the central bank of Japan
Related events
- Markets are looking for clues regarding future rate hikes by the Bank of Japan, while talks focus on deepening economic and strategic ties.
- Takeshi Minami analyzes corporate earnings and the Bank of Japan's consideration of rate hikes.
- Mizuho expects the Bank of Japan to accelerate interest rate hikes, a move supported by Takaichi's government.
- BOJ rate hike speculation causes Yen surge and risk asset dumping, leading to foreign reserve depletion and market shifts affecting digital assets.
- Markets are preparing for the Fed's Jackson Hole symposium while focusing on the Bank of Japan's upcoming rate hike.