According to Followin, On December 12, a new Bloomberg survey showed that all 50 surveyed economists expect the Bank of Japan to raise its benchmark rate to 0.75% at next week’s meeting — marking the first fully unanimous rate-hike call under Governor Ueda. Since this hike is already fully priced in, the true market focus has shifted to the BOJ’s guidance on the pace of hikes over the next 6–12 months, the estimated neutral-rate range, and the expected peak of this policy cycle.
Nearly two-thirds of economists expect the BOJ to hike every six months, with the median terminal rate rising to 1.25%, implying at least two additional hikes ahead. The neutral-rate range (1%–2.5%) may also see its lower bound revised upward, which would be critical for determining both the yen’s long-term floor and the BOJ’s remaining hiking capacity. Yen weakness and imported inflation remain the main drivers behind Ueda’s early hawkish signals, while Japan’s S. Kishida administration has not opposed the upcoming hike.
Japan’s 10-year government bond yield has already climbed toward 2%, the highest since 2006, fueling concerns over fiscal deterioration. If long-end yields continue rising, they may limit the BOJ’s willingness to hike further. Many analysts believe the BOJ must strike a delicate balance between “preventing further yen depreciation” and “avoiding excessive bond-market volatility.”
Bitunix Analyst View:
If the BOJ signals a stronger adjustment to its neutral-rate target, global carry trades may tighten, impacting FX markets and global risk appetite. In the short term, the crypto market should closely monitor USD/JPY volatility to gauge shifts in liquidity preference and anticipate changes in market-wide liquidity expectations.
