1. Citigroup: Expects the Bank of Japan to keep interest rates unchanged at 1.25%, with the next rate hike anticipated in December, potentially reaching 2.0%. The market has largely priced in the gradual rate hike path, therefore the October decision's impact on the yen, Japanese government bonds, and the Japanese stock market is likely to be limited.
2. Goldman Sachs: Expects the Bank of Japan to keep interest rates unchanged at 1.25%. The core inflation forecast for fiscal year 2026 is expected to be revised downwards, reflecting the current low inflation level. The core inflation forecast for fiscal year 2027 is expected to be revised upwards due to the rebound in oil prices. The next rate hike is expected in January 2027, followed by another rate hike in July.
3. Bank of America: Expects the Bank of Japan to keep interest rates unchanged at 1.25%, with a likely 8-1 vote, and hawkish member Takada likely casting the sole dissenting vote in favor of a rate hike. The Bank of Japan (BOJ) may announce that underlying inflation has reached a level roughly consistent with its 2% price stability target, while slightly raising its median core CPI forecast for fiscal year 2027. However, its overall assessment of economic growth and risks will remain largely unchanged.
4. ANZ: BOJ expects a 25 basis point rate hike in December and another 25 basis point hike in March 2027. However, the BOJ must monitor economic growth. High geopolitical uncertainty and uneven economic growth do not support aggressive tightening.
5. MUFG: There are currently no clear signals that the BOJ is considering a rate hike as early as this month. The BOJ may indicate that underlying inflation has reached a level consistent with its 2% target and continue to emphasize the upside risks to inflation. 25 basis point rate hikes are expected in December 2026 and April 2027, respectively.
6. Wells Fargo: BOJ expects to keep interest rates unchanged at 1.25%. Market focus will be on the latest forecast data and whether policymakers show stronger confidence in the persistence of domestic inflationary pressures. We continue to expect the Bank of Japan to raise interest rates again in December and further in 2027, bringing the policy rate to 1.75%.
7. Danske Bank: We expect the Bank of Japan to keep interest rates unchanged at 1.25%, with the next rate hike scheduled for December. Despite gradually accumulating inflationary pressures and a tightening of support from the robust recovery, the Bank of Japan's cautious stance makes maintaining the current rate seem like a certainty.
8. Brown Brothers Harman: We expect the Bank of Japan to keep interest rates unchanged at 1.25% to allow more time to assess the effects of the 25 basis point rate hike implemented in September. Current strong underlying inflation data provides ample room for the Bank of Japan to release a more hawkish outlook report.
