According to Zhizhong Finance APP, after the Governor of the Bank of Japan, Ueda Kazuo, expressed a cautious attitude toward interest rate cuts, analysts from Bank of America and Nomura Holdings have postponed the expected timing for the Bank of Japan's next rate hike from January next year to March.

On Thursday, the Bank of Japan's Policy Board decided by an 8-1 vote to maintain the short-term policy interest rate at 0.25%. This indicates that amid the anticipated uncertainty brought by the economic policies of elected President Trump in the USA, the policymakers of the Bank of Japan tend to act cautiously.

Ueda Kazuo stated at the press conference following the Bank of Japan's interest rate decision that more information regarding Japanese wages and Trump's policies is needed before deciding to raise interest rates. Ueda Kazuo said, "We notice that when we delay raising interest rates, if we wish to eventually raise the rates close to neutral levels, that could mean the pace of future rate hikes may accelerate. Of course, we will also take this into account when formulating policy. That said, the underlying inflation is rising, but at a moderate pace, which allows us to slow the pace of rate hikes. We are acting slowly on rate hikes because the rise in underlying inflation is very moderate."

It is worth noting that Ueda Kazuo showed little concern over the weak yen and did not express any urgency for tightening monetary policy at this press conference, further dampening expectations for an imminent increase in Japan's key interest rates. Until yesterday, the market still believed that the Bank of Japan was most likely to raise rates in January next year.

Bank of America economists for Japan and Asia, Izumi Devalier, stated: "Ueda Kazuo's tone in the press conference was undoubtedly dovish. He did not give any signals indicating that the Bank of Japan is inclined to raise interest rates in January next year."

Analysts at Bank of America expect that the Bank of Japan will delay implementing monetary tightening policies, projecting a rate hike in March next year, followed by increases of 25 basis points in October 2025 and April 2026. Previously, analysts had expected the Bank of Japan to raise rates in January and July 2025 and January 2026.

Analysts from Nomura Holdings pointed out that due to the remarks of Kazuo Ueda, the Japanese yen has weakened, and market participants may closely monitor any verbal interventions from the Japanese Ministry of Finance and Kazuo Ueda, including a speech the latter plans to give on December 25. Japan's Minister of Finance Katsunobu Kato and Atsushi Mimura, the head of the foreign exchange affairs at the Ministry of Finance, both expressed their concerns about the recent trends of the yen's exchange rates. Katsunobu Kato added that Japanese authorities will take action at the appropriate time to support the yen.

Analysts from Nomura Holdings stated: "The meeting in January next year will still be another 'live meeting', and a rate hike is still possible. However, we believe that Kazuo Ueda's remarks do not strongly support expectations for a rate hike in January next year."

The market has already priced in the Bank of Japan's delay in raising interest rates. Earlier on Friday, the yen fell to a five-month low, and yields on both two-year and ten-year Japanese government bonds declined. Overnight swap indexes indicate that the likelihood of a rate hike by the Bank of Japan in January next year is only 45%, down from about 60% last week.