From our other sites
The story
On September 1, Bank of Japan Governor Kazuo Ueda indicated that the BOJ will consider a rate hike at its next policy meeting on September 17–18. The leading proposal would raise the policy rate from around 1% to around 1.25%, with Ueda also noting that inflation is approaching the 2% target. His comments came a day after U.S. Treasury Secretary Scott Bessent urged the BOJ to raise rates. On 5ch, opinions flew over just how big the hike should be, with some arguing “1.25% isn’t enough” and others insisting “it should be 1.5%,” while others voiced concern over the impact on variable-rate mortgage holders and a possible rise in small business bankruptcies. The debate centered less on whether to hike than on how far to go.
[Asheville, Kyodo] Bank of Japan Governor Kazuo Ueda said on the 1st that the BOJ intends to consider raising its policy interest rate at its next monetary policy meeting on the 17th and 18th. “We want to discuss this at every meeting, including the next one,” he said. The leading proposal is to raise the rate from around 1% to around 1.25%. He also said the BOJ would keep watching the effects of its past rate hikes, explaining that “we will manage policy while also factoring in the risk that prices could run higher than expected.” He spoke at a press conference following the G20 finance ministers and central bank governors’ meeting in the United States.
Ueda indicated that the underlying inflation rate the BOJ focuses on has “gotten quite close to the 2% price stability target.” He also revealed that he met with U.S. Treasury Secretary Bessent on August 30, saying, “We were able to have a productive discussion on a range of topics.”
At a separate press conference on September 1, Bessent called on Japan to move away from its accommodative monetary policy of keeping interest rates low, pressing the BOJ to hike. While crediting the Abe administration’s “Abenomics” economic policy with achieving results, he remarked that “now is the era of Takaichinomics,” and also had pointed comments about Japan’s fiscal management.
Source: 47news.jp / Read the original article
What people said
Leak "1.25%" to the media as usual, then quietly surprise everyone with 1.5% — that might actually stop the yen's slide.
Zombie companies would get weeded out.
Ueda can't pull another "Ueda shock" lolol (a reference to the market turmoil his earlier surprise rate hike triggered)
That's just the interest payments alone.
This is truly the devil's Abenomics.
Devil's MMT.
People who buy government bonds get the interest, so what's the problem?
Foreign pressure solves everything…!!
Johnny's and Fuji TV both got cleaned up thanks to foreign pressure too, after all. (both talent agency/network scandals drew heavy foreign media scrutiny)
It's not like "if Ueda's term happened to end this year, he could freely hike without worrying what comes after." This isn't just about Ueda alone.
These guys are the real scumbags.
The yen right now is just being watered down.
Stop messing around and just raise rates already. Damn it.
For a while, all that'll happen is the extra interest cost just gets tacked onto prices.
Just jack it straight up to 5%.
That'd bring the dollar down to around 105 yen.
Even if stocks crash to 20,000 and mortgage defaults spike, most people would still come out ahead.
There's no way raising it to 5% now stops at 105 yen.
If that happened, Japan's rates would clearly be higher than the US's, and the yen-dollar relationship would flip into a high-yield currency from a country running a huge current account surplus versus a low-yield currency from a country running a huge deficit — the yen could break clean through that and surge all the way to around 50 to the dollar.
If that happens, regional economies collapse.
A Japan-triggered global depression might not be far off.
Regional banks and credit unions would rake it in, lending to businesses and issuing mortgages at higher rates. Bank stocks are up across the board.
Worried about bad loans from a wave of small business failures? Those small firms were only being kept alive by policy in a zero-rate environment where they weren't making any real profit anyway.
For people who bought 5 years ago, payments jump to 1.25x starting next year (simple math).
On top of that, the property tax reduction runs out too.
And if you've got kids, you might be hitting junior high, high school, or college tuition around the same time.
Easy to say, but this could bring on a real recession.
December's when the next hike's expected.
isn't that just saying "go full survival-of-the-fittest neoliberalism"?
Guess Koizumi and Takenaka were right all along. (the early-2000s PM and economy minister behind Japan's market reform push)
Setting aside things like abolishing layoff restrictions, there really are way too many pointless zombie companies.
Isn't that one reason wages aren't rising? If the labor shortage is real, I think it's fine to let them go under.
There'll be a wave of small business bankruptcies.
And that's a problem how?
Even solid, well-run companies rely on bank loans for working capital. When rates rise, profits shrink. With the government pressuring companies to raise wages, social insurance costs climbing, and now profits getting squeezed by higher rates too, bankruptcies are bound to increase.
Apparently this year's projected corporate bankruptcies are running at 200% of last year's.
Sure, if you assume interest payments go up while sales, prices, and profits all stay frozen, of course it looks dire lol. That's the exact same scare tactic economic commentators have been recycling forever lol.
Yeah.
So what's the problem with that?
Background and Key Points of This Topic
The BOJ’s policy rate has been rising in stages since it ended negative rates in March 2024, and the leading proposal now is another 0.25-point increase from the current roughly 1% level. The real point of contention is how large the hike should be: some in the thread call 1.25% “too tame” and push for jumping straight to 5%, while others offer the more sober observation that, given long-term rates are already in the 3% range, even 1.5% wouldn’t count as a positive surprise — views on the right size of the hike are split. One point that’s easy to misjudge is just how big an impact the hike could have on variable-rate mortgage holders: those who borrowed five years ago could see repayments rise to roughly 1.25 times their current level, and the timing coincides with other rising costs, like the expiration of property tax reductions. There’s also a clash between the view that rate hikes will weed out small and mid-sized businesses and the view that they’re actually a tailwind for regional banks and credit unions thanks to improved lending margins — worth remembering that neither view alone tells the whole story.
*This article is compiled from excerpts and a summary of the 5ch (News Express+) thread “[BOJ] Considering a September Rate Hike — 1.25% the Leading Figure.”
Leave a Reply