Bank of Japan expected to raise rates this week – but there is a hurdle to overcome first

Market expectations are high for a Bank of Japan rate hike at their January 23 and 24 meeting this week.

Check out this graph from Reuters on inflation sitting above target since late 2022:

The hurdle to a rate hike this week is any unexpected market volatility following Trump’s swearing in later today, January 20.

The BoJ is watching market response to any immediate policy moves from Trump. The hints we have had just today are moves on immigration and oil:

• Trump to issue executive orders on immigration, energy, government hiring policies soon
• Leaks around Trump’s ‘day one’ executive orders have not mentioned tariffs at all
• Trump spoke at a rally – hinted at action on immigration and energy (nothing on tariffs)

This article was written by Eamonn Sheridan at www.forexlive.com.