06:33 AM EST, 12/20/2024 (MT Newswires) -- The Bank of Japan (BoJ) held its policy rate unchanged

at 0.25% this week, noted UBS.

Given the uncertainty in the United States economy and politics, and about wage growth in Japan, the BoJ seems in no hurry to raise policy rates, wrote the bank in a note to clients.

Governor Kazuo Ueda also adopted a dovish tone on

the pace of rate hikes, stated UBS.

The bank expects the next rate hike in March 2025. By

early spring, more data on wage developments in Japan and greater clarity on the US side should allow

for more policy normalization.

UBS forecasts two rate hikes in 2025 followed by another increase in H1 2026. If the inflation and economic growth trends continue as the bank expects, that would justify raising interest rates toward the neutral rate.