A Bank of Japan survey released Thursday showed major lenders reported higher
corporate demand for funds versus three months ago, suggesting recent rate hikes
have not curtailed lending. Ahead of next week’s Bank of Japan policy meeting,
the data bolsters market expectations that the central bank will lift the policy
rate from the current 1.25% to curb upside inflation risk. Oxford Economics
Japan head Shigeto Nagai said Japan’s resilience to higher rates could allow the
Bank of Japan to raise its policy rate above 1.75% to prevent further yen
weakness and avoid unanchoring inflation expectations.
