BOJ’s Double Bind: Higher Interest Rates Meet Fiscal Constraints The Organisation for Economic Co operation and Development (OECD) has predicted that Japan's central bank, the Bank of Japan (BOJ), will hike its policy rate to 2% by the end of 2027.
This forecast is consistent with a global trend towards tightening monetary policies. Japan's economy is in a precarious situation due to low interest rates and accommodative fiscal policies.
The BOJ has been trying to balance competing interests for years, keeping borrowing costs low to stimulate economic growth while making Japan vulnerable to rising interest rates.