Golden Finance reports that, according to three sources, the Bank of Japan may maintain its commitment to continue raising interest rates at next week's meeting, but will emphasize that the pace of further rate hikes will depend on the economy's response to each increase. Bank of Japan Governor Kazuo Ueda has essentially pre-announced a rate hike in December, and the market has almost fully priced in the possibility of raising the rate from 0.5% to 0.75% in December. Market attention has shifted to how far the Bank of Japan can raise rates to a neutral level. Sources say that although the central bank may internally update its estimate of how far its policy rate is from what is considered neutral, it will not use this estimate as a primary communication tool for future rate hike paths due to the difficulty of making precise forecasts. Sources indicate that, conversely, the Bank of Japan will explain that future rate hike decisions will be based on considerations of how past rate increases have affected bank lending, corporate financing conditions, and other economic activities. One source stated, "Japan's real interest rates are very low, which allows the Bank of Japan to continue raising rates in several stages," and two other sources share the same view. (Jin Shi)
