Bank Of Japan Likely To Delay Further Interest Rate Hikes Until 2025, Ex-Official Predicts

A former Bank of Japan (BOJ) board member indicated that the central bank is expected to postpone any additional interest rate increases until next year, prioritizing market stability in the short term.

What Happened: "They won't be able to hike again, at least for the rest of the year," said Makoto Sakurai, a former BOJ board member, in an interview with Bloomberg. "It's a toss-up whether they can do one hike by next March," he added, underscoring the uncertainty surrounding the bank’s next move.

This development comes after the BOJ made a significant shift on July 31, raising its key interest rate to approximately 0.25%, up from a range of zero—a landmark move that marked the first rate hike in over a decade.

The central bank had also suggested the possibility of additional hikes, but recent market reactions seem to have tempered that outlook.

The initial rate hike had a profound impact on the Japanese yen, driving it higher and leading to the unwinding of “risk-on” yen carry trades.

This market shift contributed to a sharp decline in traditional risk assets, including Bitcoin BTC/USD, which plummeted from around $65,000 to $50,000 in just a week.

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However, Bitcoin has since rebounded, trading above $58,000, as market sentiment began to stabilize on Wall Street.

The volatility and market concerns prompted BOJ Deputy Governor Shinichi Uchida to clarify the bank’s stance, emphasizing that further rate hikes would not be pursued if market conditions remained unstable.

"Uchida's remarks were appropriate because market stabilization is very important now," Sakurai commented, supporting the central bank’s cautious approach.

"The BOJ is moving from excessive monetary easing to appropriate monetary easing, and the biggest problem is that Ueda failed to communicate firmly they will maintain easing. That's always been a condition they've kept,” he further noted.

What’s Next: The BOJ's strategy and its implications for global markets are likely to be a focal point at upcoming financial events, including Benzinga’s Future of Digital Assets conference on Nov. 19, where experts will gather to discuss the evolving landscape of digital finance amid central bank policies and market shifts.

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