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BOJ Poised to Raise Rates Amid 7% Inflation

8/5/2026

26 4 Full Breakdown

Summary

Story summary

BOJ is expected to raise rates at its September 17-18 meeting after Treasury Secretary Scott Bessent said it faces pressure to hike.
The BOJ kept its rate at 1 percent in July, with only one board member supporting a hike.
June labor cash earnings rose 3.4 percent YoY, matching forecasts, while real wages fell 1.1 percent YoY.
Rengo reported average wage growth of 5.01 percent, the third year above 5 percent, while June inflation hit 7.1 percent.

History

Historical Context

In June 2006 the Bank of Japan raised its policy rate from 0% to 0.25%, ending a decade of zero-interest that began with the 1999 zero-rate policy and the 2001 quantitative-easing program. Prime Minister Junichiro Koizumi praised the shift, and today Treasury Secretary Scott Bessent points to that precedent while urging another hike.

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Story summary

BOJ is expected to raise rates at its September 17-18 meeting after Treasury Secretary Scott Bessent said it faces pressure to hike.
The BOJ kept its rate at 1 percent in July, with only one board member supporting a hike.
June labor cash earnings rose 3.4 percent YoY, matching forecasts, while real wages fell 1.1 percent YoY.
Rengo reported average wage growth of 5.01 percent, the third year above 5 percent, while June inflation hit 7.1 percent.

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