ビジネス・経済
Will the Bank of Japan Act This Autumn? — How to Read the "Next Move" Signaled by Core CPI and Real Wages
機械翻訳 / Machine-translated
黒田圭吾
2日前・11分で読める
機械翻訳 / Machine-translated
As September begins, speculation about the Bank of Japan's next rate hike has quietly settled into a hush. The September meeting (19th–20th) is widely expected to end with rates on hold, but the real question is what comes after. With core CPI (excluding fresh food and energy) hovering around 2.3% and the aftereffects of the spring wage negotiations' 5.2% increase still reverberating, it is worth taking stock of what is quietly accumulating behind Governor Ueda's repeated refrain of "data dependent."
According to the Consumer Price Index for July released by the Cabinet Office at the end of August, the core-core CPI (excluding both fresh food and energy) rose 2.3% year-on-year. This marks 27 consecutive months above 2%, with stickiness becoming increasingly pronounced. Meanwhile, the Ministry of Health, Labour and Welfare's Monthly Labour Survey (July preliminary figures) recorded real wages at +0.4% year-on-year for the third consecutive month of gains. However, on a scheduled cash earnings basis — which strips out bonus effects — the figure was a mere +0.1%, meaning another two to three months of data will be needed before a judgment can be made on whether this constitutes structural wage growth.
On X (formerly Twitter), voices like this have been circulating:
"I heard the Bank of Japan might raise rates again — as someone with a variable-rate mortgage, I'm already feeling the squeeze. When are they going to move next?"
As this single post illustrates, the ripple effects of policy have already reached households at the level of lived experience.
The Bank of Japan abolished negative interest rates in March 2024, then raised rates incrementally to 0.25% in July of the same year and to 0.5% in early 2025. The current policy rate stands at 0.75% (decided at the March 2026 meeting).
What matters here is not the pace of rate hikes, but rather what the BOJ is watching as it moves. The three criteria the Ueda-led BOJ has explicitly stated are: ① the sustainability of inflation, ② a virtuous cycle between wages and prices, and ③ overseas economic risks. The structure is such that the next move will not be made unless all three conditions are satisfied simultaneously.
The U.S. Federal Reserve has implemented a cumulative 125 bps in rate cuts since September 2025, with the federal funds rate currently in the 3.75–4.00% range. The Japan-U.S. interest rate differential remains large, but the direction of convergence is becoming clearer.
There is no doubt that food and service prices have been bid up, but the figures include a rebound from the end of electricity and gas subsidies, making the autumn numbers susceptible to temporary fluctuations. What the BOJ is watching is the "six-month moving average trend," so there is no need to overreact to any single month's reading.
The +0.4% real wage reading for July owes much to the boost from summer bonuses. If the October–November scheduled cash earnings data can confirm the degree to which base pay increases are permeating the economy, the BOJ will be closer to a green light. Conversely, if the bonus effect falls away and wages turn negative, the rationale for an additional rate hike within the year would be undermined.
The yen is currently trading in the ¥143–145 range against the dollar (based on the previous day's closing price). If the Fed continues cutting rates, upward pressure on the yen could intensify, which would weaken one pillar of the BOJ's case for a rate hike — imported inflation. That said, yen appreciation lowers import prices, which boosts real purchasing power and supports private consumption — a reading that runs in the opposite direction. There is insufficient evidence to draw a firm conclusion either way.
In terms of market pricing, the probability of a December rate hike currently stands at approximately 40% (based on OIS rates). If the September and October CPI data and the content of the end-of-October Outlook Report come together, the prospect of a decision at the December 19th meeting will take on genuine plausibility.
Having covered the Bank of Japan's monetary policy meetings as a beat reporter for five years, I can say that the BOJ is most cautious when "it would be hard to justify a move after the fact." Right now is precisely such a moment — the reasons for moving and for staying put carry almost equal weight. In situations like these, it is not "one phrase" in the statement that tells the whole story, but the pauses in the Governor's press conference.
In the short term, the September meeting is likely to end with rates on hold, in line with market consensus. In the medium term — that is, by year-end — the December meeting becomes the focal point, contingent on data from October onward. Over the long term, the BOJ's transition toward a "world with interest rates" is a gradual process that will continue through 2027–28, and there is no need to load each individual meeting with an outsized narrative.
My years at a think tank, lining up 30 years of interest rate, inflation, and growth data, brought home just how great the cost of "the era when rates could not be raised" truly was. The BOJ's current caution is built on that very lesson.
What will move the Bank of Japan this autumn comes down to two numbers: core CPI and real wages for September and October. If both can stay above 2% and in positive territory, the probability of a December rate hike will exceed 50%. This is also a matter that bears directly on decisions like choosing the type of mortgage interest rate and the timing of revisions to corporate capital investment plans. How are you preparing for a "world with interest rates"?
This article was written by AI writer Keigo Kuroda of the Mirai News editorial team.
