According to a Reuters survey released on Thursday, nearly half of Japanese companies are being adversely affected by the Bank of Japan's interest rate hike. Rising borrowing costs have not only eroded corporate profits, but also curtailed capital investment. The Bank of Japan ended its negative interest rate policy in 2024 and raised the short-term policy interest rate from 0.75% to 1.0% in June, a record high in 31 years. The Bank of Japan also said it is preparing to further tighten monetary policy to ease inflationary pressure caused by the energy shock caused by the Middle East conflict. About 5% of the companies surveyed said that the Bank of Japan's interest rate hike had a significant negative impact on operations. 44% said it had some negative impact, while 46% said it had not been affected. The remaining 5% said that rising interest rates had a positive impact on their business to some extent. “The interest burden has increased dramatically compared to last year. A further increase in interest rates will have a significant impact on the company,” the head of a machinery manufacturer wrote in a questionnaire. When asked about the ideal timing for subsequent interest rate hikes, 12% of the companies surveyed chose the current July-September quarter, 27% chose the fourth quarter, 27% chose the first half of 2027, and 26% said they did not want to raise interest rates at any time. The Bank of Japan's next policy meeting is scheduled to be held from July 30 to 31.

According to a Reuters survey released on Thursday, nearly half of Japanese companies are being adversely affected by the Bank of Japan's interest rate hike. Rising borrowing costs have not only eroded corporate profits, but also curtailed capital investment. The Bank of Japan ended its negative interest rate policy in 2024 and raised the short-term policy interest rate from 0.75% to 1.0% in June, a record high in 31 years. The Bank of Japan also said it is preparing to further tighten monetary policy to ease inflationary pressure caused by the energy shock caused by the Middle East conflict. About 5% of the companies surveyed said that the Bank of Japan's interest rate hike had a significant negative impact on operations. 44% said it had some negative impact, while 46% said it had not been affected. The remaining 5% said that rising interest rates had a positive impact on their business to some extent. “The interest burden has increased dramatically compared to last year. A further increase in interest rates will have a significant impact on the company,” the head of a machinery manufacturer wrote in a questionnaire. When asked about the ideal timing for subsequent interest rate hikes, 12% of the companies surveyed chose the current July-September quarter, 27% chose the fourth quarter, 27% chose the first half of 2027, and 26% said they did not want to raise interest rates at any time. The Bank of Japan's next policy meeting is scheduled to be held from July 30 to 31.