Bank of Japan officials see a good chance of an interest rate hike next week as long as the arrival of Donald Trump at the White House doesn’t trigger too many negative surprises, according to people familiar with the matter.

BOJ officials acknowledge there’s a likelihood the rate will be raised from 0.25% at the end of its two-day meeting on Jan. 24, unless Trump ruffles markets or changes expectations about the global economy at the start of his presidency, the people said.

The central bank will reach a final policy conclusion after examining economic data, markets and the implications of US economic policies through to the last minute, the people said.

The views among the officials largely support elevated market expectations for a rate increase this month after Governor Kazuo Ueda and one of his deputies, Ryozo Himino, said this week that they will decide if a hike is warranted at the January gathering. Yen has climbed for two straight days against the dollar to its strongest level in a month.

“Ducks are lining up for a BOJ hike next week and the mood music from officials is becoming more assertive,” said Rodrigo Catril, a currency strategist at National Australia Bank in Sydney. “Of course Trump tariffs could spoil the party, but Japan is not Trump’s main focus of attention.”

Economic Outlook
The officials see Japan’s economy and inflation continuing to move largely in line with their projections, raising their confidence that the bank’s economic outlook will materialize in support of their stable 2% inflation target, according to the people.

Ueda has repeatedly said that the bank will adjust the degree of monetary easing if prices and the economy move in track with the BOJ’s economic outlook.

Officials see a likely upgrade of the BOJ’s forecasts for inflation excluding fresh food and energy for this fiscal year and next year as supportive of a rate increase at the meeting, according to the people.

Since the last meeting in December, the officials have also become more confident over wage increases particularly after a BOJ’s branch managers’ meeting earlier this month. Annual spring wage negotiations are likely to produce a solid outcome similar to last year’s and Japanese firms are increasingly taken raising wages as a given, the people said.

Momentum in wage growth is one of two key points Ueda says needs close attention when deciding the timing of raising borrowing costs in addition to the outlook for the US economy. While BOJ officials hope the launch of Trump’s second administration goes smoothly, they need to remain vigilant for any risks, the people said.