BOJ expected to hike rates by 25 basis points to fresh three-decade high: CNBC survey

The Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Friday, July 31, 2026. Toru Hanai | Bloomberg | Getty ImagesThe Bank of Japan is likely to raise rates to 1.25% at the end of its two-day meeting on Friday amid inflationary pressures, according to a CNBC survey. A hike would signal an acceleration of the tightening cycle, faster than the six-month interval the Bank has been following since it started policy normalization in March 2024. The BOJ last raised rates in June. Around 89% of respondents said they expect the BOJ to hike by 25 basis points, citing higher inflation, higher wages, and pressure from the U.S. government. Japan's headline inflation rate for July hit its highest this year, at 1.9%, due to increased energy costs from the Iran war. In the same month, real wages rose 2.4%, rising for the seventh month in a row. Treasury Secretary Scott Bessent told BOJ Governor Kazuo Ueda to take "decisive market and monetary steps" at the G20 finance ministers and central bank governors meeting earlier this month. Bessent later posted on social media that they discussed the importance of anchoring inflation expectations and avoiding excess volatility in exchange rates. "The T...