BOJ summary indicates chances of December interest rate hike

[A world globe with an Japanese flag pin showing Japan]
Richard Drury

The latest summary of opinions from Bank of Japan's policy meeting indicated a significant chance of an interest rate hike as soon as December, with roughly half of market watchers forecasting such a move.

"If its outlook for economic activity and prices is realized, the bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation," BOJ policy board member Junko Nakagawa said in a speech Monday.

A committee member pointed out that "the conditions for further normalizing the policy interest rate are likely to be fundamentally in place," while emphasizing the need to examine potential inflation trends.

Japan’s 10-year government bond yield climbed to 1.69%, close to a 17-year high. Markets are weighing the possibility of a move in December or January, depending on whether businesses will continue to support a rise in wages over the next year.

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