Barclays: The possibility of a rate hike by the Bank of Japan in December is increasing.

Barclays Bank economist Naohiko Baba pointed out in a research report that the Bank of Japan is now more likely to raise policy rates in December rather than in January next year. He stated that the tendency for Bank of Japan Governor Haruhiko Kuroda to raise rates in December seems stronger than previously expected. Kuroda's comments suggest that concerns about deterioration in US employment data have greatly diminished, while expressing confidence in Japanese economic growth and other factors. Barclays believes that although a rate hike may still occur in January next year, "our assessment is that this 'dead heat' has been reversed, with December becoming the base scenario and January becoming the risk scenario." The bank expects subsequent rate hikes to only take place in January 2027, with the terminal rate forecast at 1.0%.