UBS: A rate hike by the Bank of Japan in the coming months appears justified

BlockBeats News, October 21, Masamichi Adachi, Chief Japan Economist at UBS Global Research, stated in a commentary that it seems justified for the Bank of Japan to raise interest rates in the coming months.

He noted that Japan's real interest rates are negative, which makes the financial environment very accommodative. Inflation dynamics appear to support the view that the central bank should reduce its accommodative policy, citing the expectation that long-term inflation expectations will continue to rise toward 2.0%. He also anticipates that the government will seek fiscal expansion, which could mean higher inflationary pressures. UBS expects the Bank of Japan to raise its policy rate by 25 basis points in January, but does not rule out the possibility of a rate hike in December. (Golden Ten Data)