Moody's: Bank of Japan May Raise Interest Rates to 1% by Mid-Year

MaticHoleFiller · 2026-03-18T08:48:31+00:00

Moody's Analytics expects the Bank of Japan to keep rates unchanged this week and may raise rates to 1% around the middle of the year. Middle East conflicts increase inflation risks, but uncertainty will cause the Bank of Japan to hold steady. Slowing wage growth and weak economic data make it difficult to support an aggressive rate hike plan.

MaticHoleFiller

2026-03-18 08:48:31

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Moody’s Analytics stated in a report that it expects the Bank of Japan to keep interest rates unchanged this week and possibly raise them to 1% around mid-year. The agency noted that the Middle East conflict has increased the risk of inflation accelerating again, but the uncertainty caused by the conflict will keep the Bank of Japan on hold. The agency said that a further weakening of the yen could prompt the Bank of Japan to raise interest rates earlier later this year. It added that, however, slowing wage growth and sluggish economic data make it difficult to support a more aggressive rate hike above 1%. The Bank of Japan will announce its interest rate decision on Thursday.

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