Kai Capital Macro: Expect the Bank of Japan's terminal interest rate in 2027 to reach 1.75%

Odaily Planet Daily reports that Capital Economics stated in a report that the Bank of Japan’s decision to raise interest rates was not surprising, despite its hawkish signals indicating further policy tightening in the future. The Bank of Japan expressed greater confidence in Japan’s economy’s ability to withstand tariff uncertainties and in corporate profit forecasts remaining high. It is expected that the upcoming economic activity and inflation data will more likely exceed expectations compared to the Bank of Japan’s forecasts. Capital Economics said its confidence is growing, and it expects the terminal interest rate in 2027 to reach 1.75%, higher than the market consensus. (Jin10)