The Bank of Japan is widely expected to raise its base rate to 0.5 per cent on Friday, with the 25 basis point increase the largest since February 2007, in a further sign that Japan's economy is finally returning to normal. The two key points that Bank of Japan Governor Kazuo Ueda made last month when considering a rate hike are largely clear, and so far the country's wage gains look strong without major market shocks in the early days of US President Donald Trump's second term. People familiar with the matter said earlier that Bank of Japan officials see a strong chance of raising interest rates on Friday, unless Trump creates too many negative surprises. While Ueda is unlikely to give any specific path for interest rates to preserve his options, an overly dovish-sounding statement could lead to a weaker yen and exacerbate inflationary pressures. It could also make monetary authorities highly vigilant about the possible need to intervene directly in the market. (Jin Ten)