Rating agency Fitch Ratings in its latest report on the monetary policy outlook of the Bank of Japan (BoJ) said that “the BoJ may raise interest rates to 0.5% by the end of 2024, 0.75% in 2025 and 1% by the end of 2026.”

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The BoJ is bucking the global trend of easing and raising interest rates more aggressively than we had anticipated in July, reflecting a growing belief that reflation is now firmly entrenched.

Core inflation has remained above the BoJ target for 23 months in a row.

Companies prepared to grant “permanent” and “significant” pay increases.

The situation is completely different from the 1990s, when the “lost decade” did not allow for wage growth in the face of constant deflation.

The goal of the BoJ is a fair wage-price cycle.

BoJ’s confidence that it can continue to raise interest rates in a neutral direction.

The Bank of Japan’s more hawkish stance could have global implications.