BOJ Signals Imminent Interest Rate Hike Amid Strengthening Economic Conditions 
Asian Markets Stabilize as Wall Street Rebounds and Rate Concerns Ease 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
BOJ Seen Moving Toward December Rate Hike as Yen Slides 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
South Korea Inflation Edges Up in November as Food and Service Costs Climb 
Asian Markets Mixed as Fed Rate Cut Bets Grow and Japan’s Nikkei Leads Gains 
South Korea Posts Stronger-Than-Expected 1.3% Economic Growth in Q3 
Dollar Slides to Five-Week Low as Asian Stocks Struggle and Markets Bet on Fed Rate Cut 
The Bank of Korea (BOK) is expected to keep its benchmark interest rate at 2.50% on July 10, according to a Reuters poll of 33 economists, as concerns over rising household debt and soaring Seoul housing prices outweigh immediate pressure for further easing. Despite a broader monetary policy path toward rate cuts, the central bank is pausing this month after recent data showed home-backed mortgage loans surged by 5.6 trillion won ($4.1 billion) in May, up from April’s 4.8 trillion won increase.
Monetary policy board member Kim Jong-hwa noted on June 25 that the BOK must remain cautious about renewed housing market risks. While 100 basis points of cuts have already been implemented since late 2024, board minutes from May suggest continued policy support is necessary to bolster economic growth.
Most analysts forecast another 25 basis point cut by September, bringing the rate down to 2.25% amid subdued inflation near 2% and a Q1 economic contraction of 0.2%. However, forecasts diverge for year-end levels: 16 of 31 economists expect 2.25%, 13 see a drop to 2.00%, and two anticipate no change.
Jennifer Kusuma of ANZ said persistent weak growth and stable inflation should support further easing, while Pantheon Macroeconomics’ Kelvin Lam warned that stalled U.S. trade talks could push rates lower than expected. The poll revised South Korea’s 2025 GDP growth outlook down to 0.9%, from 1.3% in April, aligning with the BOK’s 0.8% projection. Inflation is expected to average 2.0% in 2025, easing to 1.9% in 2026.
Despite holding steady in July, the BOK is likely to maintain dovish messaging, keeping the door open for future rate cuts to support South Korea’s slowing economy.
