[BOJ Policy Meeting Podcast Commentary] Resuming Rate Hikes in December: The Background and Future Scenarios Expected by All BOJ Watchers - Bloomberg

According to the latest economist survey conducted by Bloomberg, all 50 BOJ watchers surveyed expect an "interest rate hike" at the Bank of Japan's Monetary Policy Meeting to be held next week (December 18-19).

We have summarized the key points regarding this policy meeting.

* Expected rate hike to 0.75%

An increase from the current level of around 0.5% to 0.75% is anticipated. This is the first time under Governor Ueda that all respondents have predicted a rate hike.

* The primary reason is to curb the "weak yen"

The background to this rate hike is the relentless depreciation of the yen. Even under the Sanae Takaichi administration, which prioritizes monetary easing, the majority (98%) believe that the government will "passively accept" this rate hike, primarily as a means to curb the weak yen.

* Future pace expected to be "once every six months"

Market interest has shifted to the pace of rate hikes. Over 60% predict "about once every six months," and the median forecast for the terminal rate has risen from the previous 1.0% to 1.25%.

* Focus on the "neutral interest rate"

The focus is on whether the BOJ will provide new insights regarding the "neutral interest rate," which neither stimulates nor cools the economy. The median neutral rate assumed by the market is around 1.5%.

Compounded by concerns over fiscal deterioration due to the 21.3 trillion yen economic stimulus package, long-term interest rates temporarily rose to 1.97% (a level not seen since 2007). The distance from the government and communication with the market are likely to become more critical than ever.

https://www.bloomberg.com/jp/news/articles/2025-12-11/T739L9T9NJLY00