A Bloomberg survey shows 90 % of 44 economists expect the Bank of Japan to lift its benchmark rate from 1 % by December. The poll, released Wednesday, follows the bank’s first hike since 1995, which nudged borrowing costs higher for the first time since December. Ahead of the next policy meeting, market watchers anticipate a tightening cycle.

The survey split preferences: 52 % favor a December hike, 36 % October, and nearly a quarter point to September as the earliest date. Economists cite diminished downside risks and rising inflation upside as the trigger for a faster cycle, with some projecting up to three more hikes in 2027. This shift signals a departure from the biennial pacing that has characterized the BOJ’s recent policy.

After Tuesday’s decision, the yen held near ¥160 to the dollar as traders weigh possible interventions. Investors also await the U.S. Federal Reserve’s meeting, while the European Central Bank’s recent hike adds pressure. Speculation about a June rate increase grew when three BOJ officials dissented at the April meeting. Market participants expect tighter policy to align Japan with global monetary tightening.

If the BOJ follows the majority view, its overnight call rate could reach 2 % by the end of 2027, up from the current 1 %. This acceleration would narrow the yield gap with U.S. and eurozone markets, potentially reshaping capital flows and forcing Japanese firms to reassess debt strategies. Such a shift would also pressure the yen, prompting further intervention considerations by the BoJ.