Japan Bank Plans Interest Rate Hike This Fall Amid Economic Growth

Japan's central bank is considering raising its benchmark interest rate as early as October, with decisions influenced by upcoming economic data and the effects of new US tariffs, signaling a potential shift from its long-standing ultra-low rate policy. Former BOJ board member Makoto Sakurai anticipates a rate hike due to robust economic data delayed by tariff impacts, while current officials remain cautious pending inflation and wage negotiation outcomes. This move could have significant global implications, affecting currency markets and investment flows, as Japan is one of the last major economies maintaining near-zero rates. Meanwhile, Brazil's central bank has entered a new phase of monetary policy by keeping its benchmark Selic rate at a near two-decade high of 15% to assess if this stance will sufficiently curb inflation toward its 3% target. Despite recent inflation improvements, Brazilian policymakers stress the need for prolonged contractionary monetary policy due to persistent inflationary pressures and remain vigilant for any signs that may necessitate resuming rate hikes. These developments in Japan and Brazil highlight contrasting central bank strategies amid ongoing efforts to balance inflation control with economic growth.