Recent economic data released on Friday suggest that Japan’s economy is gaining momentum, sparking increased speculation about when the Bank of Japan (BOJ) might implement its next interest-rate adjustment. Indicators pointing to stronger economic resilience have heightened expectations that the central bank could resume tightening monetary policy in the near term. However, with only one scheduled meeting remaining this year, the window for action is narrow. n nPolicymakers are closely monitoring inflation trends, wage growth, and consumer spending patterns to assess whether conditions are ripe for a rate hike. While inflation has shown signs of stabilizing closer to the BOJ’s 2% target, concerns remain about the sustainability of price increases without broad-based wage gains. n nThe current phase of gradual normalization follows years of ultra-loose monetary policy aimed at combating deflation and stimulating demand. Any shift toward tighter policy would mark a significant milestone in Japan’s economic trajectory, reflecting confidence in domestic recovery. n nMarket participants are divided on the likelihood of a move before year-end, with some analysts arguing that recent data may not be sufficient to justify a change in stance. Others believe that even a symbolic rate adjustment could signal the central bank’s commitment to policy normalization. n nThe BOJ’s next decision will be closely watched both domestically and internationally, as it could influence investor sentiment and currency markets. A rate increase would be the first in a series of potential steps to recalibrate monetary settings in response to evolving economic conditions. n— news from The Wall Street Journal
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Japan Economy Shows Some Strength as Markets Weigh BOJ Hike
TOKYO—The Japanese economy is showing some signs of improvement, a slew of data indicated Friday, amid heightened speculation over the timing of the Bank of Japan’s next interest-rate hike. n nEvidence of economic resilience could firm expectations that the central bank will resume monetary tightening soon, though it has only one more opportunity to do so this year.