Strong Japanese Loan Demand Leaves Room for BOJ Hikes
Major Japanese banks report rising corporate fund demand despite recent interest rate hikes. This resilience supports expectations that the central bank will continue raising rates.
Xurve View
Insights:
Xurve View
Corporate loan demand in Japan rose during the third quarter, signaling that the BOJ's 1.25% interest rate has not hampered lending. The data reinforces market expectations that the central bank will raise borrowing costs further to curb inflation risks. The economy's resilience may allow the BOJ to push rates beyond 1.75% to prevent further weakening of the currency and the de-anchoring of inflation expectations, according to Oxford Economics head of Japan economics Shigeto Nagai.
