BOJ set to hike interest rates in December

TOKYO, Nov 20 (Reuters): The Bank of Japan will raise interest rates at its upcoming December meeting, according to a slim majority of economists in a Reuters poll, pushing through with its aim of normalising monetary policy, backed by the yen's recent decline.

Prime Minister Sanae Takaichi, a proponent of expansionary fiscal and monetary policy who came into office a month ago, has urged the BOJ to cooperate with government efforts to reflate the economy and to tread cautiously in hiking rates.

Still, economists say the conditions for a rate hike are falling into place, with the yen's depreciation strengthening the case. The yen this week has tumbled to a 10-month low against the dollar and the weakest level ever against the euro .

The BOJ last raised rates by 25 basis points in January.

In a November 11-18 poll, 53 per cent of economists, or 43 of 81, expected the Japanese central bank to raise short-term interest rates to 0.75 per cent from 0.50 per cent at its December 18-19 policy meeting.