Vincent Chung of Pryce said in an email that the Bank of Japan's interest rate hike may be more aggressive than expected by the market. “Japan's economic performance has been slightly better than average expectations, although there has been a marked slowdown,” said the co-portfolio manager of the diversified yield bond strategy. “Importantly, inflation remains stubborn, and we continue to see upward pressure from wage inflation,” Chung said. Chung pointed out that the market has recently brought forward the expected time for the Bank of Japan's next rate hike from January to this month, and the current market pricing reflects the market's expectation that there will only be one rate hike in 2026. Pryce believes it is possible to raise interest rates twice next year.

Vincent Chung of Pryce said in an email that the Bank of Japan's interest rate hike may be more aggressive than expected by the market. “Japan's economic performance has been slightly better than average expectations, although there has been a marked slowdown,” said the co-portfolio manager of the diversified yield bond strategy. “Importantly, inflation remains stubborn, and we continue to see upward pressure from wage inflation,” Chung said. Chung pointed out that the market has recently brought forward the expected time for the Bank of Japan's next rate hike from January to this month, and the current market pricing reflects the market's expectation that there will only be one rate hike in 2026. Pryce believes it is possible to raise interest rates twice next year.