08:40 AM EDT, 10/06/2025 (MT Newswires) -- Societe Generale said it had previously predicted the Bank of Japan's next rate hike would occur in October, but given

1) the result of Saturday's LDP presidential election and 2) the United States government shutdown and growing concerns about a further economic downturn, the bank changed its forecast to December.

While SocGen cannot rule out the possibility of the hike being postponed until January 2026, when the Outlook Report is released, new LDP President Sanae Takaichi has withdrawn

her proposal for a consumption tax rate cut, but she is more fiscally expansionary than the Ishiba administration.

If she also strengthens her ties with the Democratic Party for

the People, this could lead to increased pressure for a weaker yen (JPY), stated the bank. As a result, the hurdle for the government to accept a rate hike may automatically be lowered.

In addition, there is also a possibility that three members of the BoJ's October meeting will vote against maintaining the status quo, including board member Asahi Noguchi, who is somewhat favorable toward a rate hike, according to SocGen.

In that case, the governor and deputy governors may decide to bring the rate hike forward to avoid a significant vote split

within the policy board. As a consequence, for now, the bank is considering December as the main scenario.