Morgan Stanley: Japan's economic policy regime is expected to remain unchanged

Morgan Stanley economists said that although the ruling coalition failed to maintain a majority in the House of Representatives election last Sunday, Japan's economic policy system, including the Bank of Japan's 2% inflation target, is likely to remain unchanged. Economists believe that the Bank of Japan will raise interest rates in January next year as their main forecast, while a December rate hike is a risk. But if political uncertainty persists or markets become turbulent, the threshold for the Bank of Japan to act this year may be higher. (Jinshi)