UOB: Bank of Japan may be cautious in raising interest rates due to political and economic factors


two analysts from the Global Economic and Market Research Department of Dahua Bank pointed out in a report that although the Bank of Japan may continue to raise interest rates, it will become more cautious. The analysts stated: "In the short term, the market focus will shift to the vulnerability of Japanese Prime Minister Shizo Abe's administration after a series of election defeats, while Japan is still negotiating a trade agreement with the United States." Due to the uncertainty of U.S. tariff policies, the Bank of Japan may maintain interest rates at the July meeting, but is expected to maintain a normalizing monetary policy stance. Dahua Bank still expects the Bank of Japan to raise interest rates by 25 basis points to 0.75% at the September meeting, and to further raise rates to 1.00% in the first quarter of 2026.