In 2024, the Bank of Japan (BOJ) implemented major changes in its monetary policy to respond to evolving economic conditions:
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March 2024: The BOJ ended its long-standing negative interest rate policy, which had been in place to fight deflation and stimulate economic growth. This move marked the first rate increase in 17 years, signaling a move towards policy normalisation.
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July 2024: The central bank raised its short-term policy interest rate to 0.25%, moving further away from its ultra-loose monetary stance. This change was aimed at balancing economic growth with rising inflationary pressures.
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December 2024: From mid-December, the BOJ is expected to keep the current interest rate at 0.25% during its policy meeting. However, a potential rate increase of 25 basis points is expected by the end of March 2025, depending on economic indicators and the consequences of wage growth.
These policy changes reflect the BOJ's response to domestic economic developments, including rising inflation and wage growth, as well as external factors such as global economic uncertainty and trade policies.
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Coming up:
Preview:
- BOJ reportedly sees little cost in waiting for the next rate hike
- BOJ was reportedly erring towards keeping interest rates unchanged
- BOJ is reportedly considering a jump rate hike
- BOJ to raise interest rate to at least 0.50% by end of March, 51 of 52 economists say
- Goldman Sachs expects the Bank of Japan to hold steady at 0.25% at a December meeting
This article was written by Eamonn Sheridan at www.forexlive.com.
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