Bank of Japan Prepares for Gradual Interest Rate Increases

The Bank of Japan is set to gradually increase interest rates through 2027, with implications for the yen and global markets. This policy shift stems from improvements in Japanese corporate earnings and positive wage negotiations, as confirmed by economist Takayasu Kudo of Bank of America. Kudo’s report anticipates a series of incremental rate hikes commencing at 0.75% during December 2025. The Bank of Japan intends to continue this gradual approach with semi-annual rate adjustments scheduled for June 2026 and subsequent increases until 2027.