Bank of Japan rate hike in March looks likely, but uncertainty remains

A meeting of branch managers at the Bank of Japan this week supported a forecast by analysts at Nomura Securities that the central bank will raise interest rates in March rather than January. The meeting stressed that more companies recognize the need to continue raising salaries, suggesting that wages could grow in 2025. However, this does not necessarily prove that wage increases are becoming more common, Nomura Securities analysts Kyohei Morita and others wrote in a report. Looking ahead, analysts expect the economy to be driven by private consumption supported by rising wages and capital expenditures on software investment, making economic activity more "localized." However, uncertainties remain, including risks from political developments, domestic labor shortages and geopolitical tensions overseas. (Jinshi)