T. Rowe Price: The Bank of Japan may raise interest rates more aggressively than the market expects.

Vincent Chung, a portfolio manager at T. Rowe Price, said the Bank of Japan may raise interest rates more aggressively than the market expects. Japan's economy is performing slightly better than generally anticipated, although some slowdown is evident. Importantly, inflation remains persistent, and we continue to see upward pressure on wages. The market recently shifted its expectations for the next BOJ rate hike from January to this month, and current market pricing suggests only one rate hike is expected in 2026. T. Rowe Price believes there could be two rate hikes next year. (Jinshi)