The IMF expects Japan's interest rate hikes to accelerate slightly

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ME News message: On April 14 (UTC+8), the International Monetary Fund (IMF) said Tuesday that it expects the Bank of Japan to gradually raise interest rates, but at a slightly faster pace than previously expected six months ago. In its “World Economic Outlook” report, the IMF said that after Japan’s economy grows by 1.2% in 2025, its growth rate is expected to slow to 0.7% in 2026 and 0.6% in 2027—roughly in line with its October 2025 forecast. The government’s fiscal stimulus package and measures to curb fuel prices will offset the negative impacts of weak overseas demand and conflicts in the Middle East. With food and commodity prices declining, Japan’s inflation is expected to ease this year and move closer to the Bank of Japan’s 2% target by the end of 2027. The Bank of Japan’s policy interest rate is expected to be raised gradually, with its rate-hike pace slightly faster than expected as of October 2025, ultimately moving toward a neutral rate level of about 1.5%. (Source: PANews)

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