Institution: Bank of Japan may raise interest rate to 0.5% in December

The Bank of Japan is likely to raise interest rates to 0.5% from 0.25% in December as inflation-adjusted wages improve, Ko Nakayama, an economist at Okasan Securities, said in a research note. If the Bank of Japan becomes more confident in the virtuous cycle of prices and wages, it may raise its policy rate by 25 basis points every six months while keeping an eye on the impact on the market. Nakayama expects the Bank of Japan to raise its interest rate target to 0.75% in June 2025 and then to 1% in December 2025. Nakayama added that Japan's current terminal interest rate is probably around 1%. (Jinshi)