The Bank of Japan’s rationale for its surprise rate increase last week has been met with skepticism from analysts doubtful about whether the economy is really on track to meet central bank projections.
”The BOJ’s economic outlook appears to be a bit bullish,” said Yutaro Suzuki, an economist at Daiwa Securities, who questioned the bank’s assumptions on consumption in particular.
At its policy meeting in July, the central bank voted to increase its short-term policy rate target to 0.25% from a range of 0% to 0.1%, although the majority of BOJ watchers had expected the bank to wait until September or October to up rates.