The Bank of Japan's rate hike path is clear: policy dilemma under deep negative interest rates

【BiTu】At the latest Bank of Japan meeting, a committee member revealed a key signal: the central bank needs to continue raising interest rates at intervals of a few months. This pace may not seem fast, but the underlying issue is quite interesting—even raising the policy rate to 0.75%, Japan's real interest rate remains deeply in negative territory.

From another perspective, this indicates that the Bank of Japan faces a dilemma: inflationary pressures force them to raise interest rates, but the room and scope for hikes are strictly limited. When real interest rates are persistently negative, the purchasing power of savings is eroded, which has subtle impacts on global liquidity and asset allocation decisions. Clarifying expectations of rate hikes could reshape investors' attitudes toward risk assets.