Bank of America Forecasts BOJ Rate Hike to 0.75% in December, Followed by Semi-Annual Increases

The Bank of Japan is expected to raise its policy rate from 0.5% to 0.75% at its December 18-19 meeting, with subsequent hikes projected every six months, Bank of America economist Takayasu Kudo said in a report. Kudo said the BOJ has gained increasing confidence in proceeding with the December rate increase based on recent developments in corporate earnings, wage negotiations, yen depreciation in foreign exchange markets, and dialogue with the government. The economist projects further rate hikes in June 2026, followed by additional increases in January and July 2027.