ChainThink news, December 12: According to three sources, the Bank of Japan may reaffirm its commitment to continue raising interest rates next week, but will emphasize that the pace of further hikes will depend on economic responses to each rate increase.

Bank of Japan Governor Kazuo Ueda has largely pre-announced a December rate hike, with markets nearly fully pricing in the likelihood of a rise from 0.5% to 0.75%. Market focus has now shifted toward how far the central bank can raise rates toward a neutral level. Sources indicate that while the BOJ may internally update its estimate of how far policy rates are from the neutral level, it will refrain from using this estimate as a primary communication tool for future rate path guidance due to the difficulty in making precise forecasts.

Instead, sources say the Bank of Japan will explain that future rate decisions will be based on assessments of how past rate hikes have affected bank lending, corporate financing conditions, and other economic activities. One source stated, "Japan’s real interest rates remain extremely low, allowing the BOJ to continue hiking in stages," a view echoed by two other sources. (Golden 10)