Most economists expect BOJ to hike rates in latter half of 2025, survey shows

TOKYO (Reuters) - Most economists expect the Bank of Japan to raise short-term interest rates again in the latter half of this year, a monthly survey on economists conducted by private think tank Japan Center for Economic Research (JCER) showed on Thursday.

In the survey of 36 economists conducted between January 30 and February 6, 30 said they expect the BOJ to keep interest rates steady at 0.5% in the first half of 2025. The remaining six projected a hike to 0.75% during the period.

The survey also showed 28 economists forecasting a hike to 0.75% in the latter half of this year. Two of them expected rates to stay at 0.5%, while six saw rates going up to 1%.

The forecasts were roughly unchanged from the previous survey on December 23-January 8, a sign market bets on the next rate-hike timing has not changed much during the past month.

Respondents to the latest survey projected Japanese firms on average will offer wage hikes of 4.92% in this year's wage negotiations with unions, lower than last year's 5.33% increase but higher than the 4.74% forecast in the previous month's survey.

The BOJ raised interest rates to 0.5% from 0.25% at its policy meeting on January 23-24 on the view Japan was on the cusp of sustainaby achieving its 2% inflation target.

BOJ Governor Kazuo Ueda has signaled his readiness to raise interest rates further if sustained wage gains keep the economy on track to see inflation durably move around 2%.

Ueda has also said the BOJ's policy rate, at 0.5%, was still lower than levels deemed neutral to the economy. While BOJ staff estimates put the nominal neutral rate in a range of 1.0% to 2.5%, Ueda has refrained from specifying the exact level.

Ikuko Samikawa, lead economist at JCER, produced estimates in a separate report on Jan. 24 showing Japan's neutral rate to be in a range of 1.2% from 2.8%, adding the BOJ will likely raise rates at least to around 1%.

(Reporting by Leika Kihara; Editing by Shri Navaratnam)