BoJ

Barclays has moved up its forecast for the next Bank of Japan rate hike to January 2025, citing anticipated labor cost pass-through to service prices and a clearer outlook on wage hikes for FY25.

Key Points:

Revised Forecast:
- Barclays now expects the next BoJ rate hike to occur in January 2025, with a possibility of an earlier move in December 2024. This is an adjustment from their previous expectation of an April 2025 hike.
Rationale for the Adjustment:
- The shift in the timeline is driven by expectations that labor costs will pass through to service prices by year-end. Additionally, a clearer outlook for FY25 wage hikes is anticipated by the start of the new year, influencing the BoJ’s decision-making process.
Further Hike Expected:
- Barclays also forecasts an additional rate hike in July 2025, raising their projection for the terminal rate from 0.5% to 0.75%.

Conclusion:

Barclays has adjusted its timeline for the next BoJ rate hike, moving it up to January 2025, with an increased terminal rate forecast of 0.75% by July 2025, reflecting expectations of rising labor costs and service prices.

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