The BOJ is expected to raise its economic growth forecast.

BOJ's Significant Revision in Growth Forecast

According to information obtained by Bloomberg News, the Bank of Japan (BOJ) is expected to revise its economic projection upward from 0.7% for the fiscal year starting in April, in its quarterly economic growth report to be announced on January 23. Additionally, there may be updates to the forecasts for the current fiscal year.

Economic Package and Its Effects

The economic package presented by Prime Minister Sanae Takaichi is indicated to be the primary reason for this upward revision, after being approved by parliament last month. Takaichi allocates a significant budget of 17.7 trillion yen (113 billion dollars) for these fiscal measures aimed at strengthening the economy and mitigating the effects of long-term inflation.

Interest Rate Hike and Economic Outlook

Last month, the BOJ raised the policy interest rate to 0.75%, the highest level since 1995. This decision was made in response to the government's new economic measures. According to sources, BOJ officials believe these measures will increase core inflation, reinforcing the likelihood of the bank achieving its targets.

Expectations for Future Interest Rate Hikes

Sources speaking to Bloomberg indicated that market expectations suggest future interest rate hikes could occur approximately every six months. However, it was reported that officials have not clearly expressed a view on the matter following the recent interest rate increases. If the economic outlook materializes, no changes in the bank's stance on interest rate hikes are anticipated.