BOJ likely to raise rates 25bp April, former board member says. Gradual move toward 1.25%

Former BOJ board member Seiji Adachi indicates that the next interest rate hike is likely to occur in April, rather than March, as policymakers want firmer confirmations on wage inflation. A March increase is seen as risky due to insufficient data. The late-April meeting will include wage negotiation outcomes and revised forecasts, crucial for the BOJ's strategy for maintaining inflation around its 2% target. With more hawkish sentiment within the BOJ and manageable political risks, rates could rise toward 1.25%, symbolizing a return to a more normalized policy. However, the process remains cautious, emphasizing the need for solid economic indicators before any action is taken.