BOJ likely to raise rates in December, government to tolerate move, sources say

TOKYO, Dec 4 (Reuters) – The Bank of Japan is likely to raise interest rates in December with the government expected to tolerate such a decision, three government sources familiar with the deliberations said.

The BOJ looks set to proceed with a hike in its policy rate to 0.75% from 0.5%, which was flagged by Governor Kazuo Ueda in a speech on Monday, the sources said. It would be the first hike since January.

“If the BOJ wants to raise rates this month, please make your own decision. That’s the government’s stance,” said one of the sources, adding it was nearly certain the bank will proceed with a hike this month.

The administration is prepared to tolerate a December hike, another source said. The sources spoke on condition of anonymity as they were not authorised to speak publicly.

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