The Bank of Japan’s reasoning for last week’s surprise rate hike has been met with scepticism by analysts, who doubt the economy is actually on track to meet the central bank’s forecasts.
“The BOJ’s economic outlook appears somewhat optimistic,” said Yutaro Suzuki, an economist at Daiwa Securities, who questioned the bank’s assumptions on consumption in particular.
At its July policy meeting, the central bank voted to raise its short-term interest rate to 0.25% from 0% to 0.1%. However, most BOJ analysts had expected the bank to wait until September or October to raise rates.
