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BOJ's Nakagawa Considers Further Rate Hikes by Year-End Amid Positive Economic Indicators

Sep 11, 2024, 01:34 AM

The Bank of Japan (BOJ) is considering further interest rate hikes by the end of the year, despite recent market turmoil. This decision is supported by a slightly slower but still positive economic expansion in Q2, which keeps the BOJ on track for potential rate increases. BOJ board member Junko Nakagawa emphasized the importance of monitoring market movements and inflation trends, noting that real interest rates remain very low even after the July rate hike. Nakagawa also highlighted potential upward price risks, weakened personal consumption, and the need to observe the effects of market developments on future prospects. The yen has gained strength, reaching its highest level since January 2, 2024, against the dollar, and Japan's exports and output are expected to resume an uptrend as overseas economies sustain moderate growth. Wage growth is also likely to accelerate as a trend reflecting rising prices, and exiting deflation is on the horizon.