The Bank of Japan may raise interest rates at its Dec. 18-19 Policy Board meeting because the yearend session is a "golden opportunity" for the bank to tighten monetary policy before the slowing U.S. economy begins to bite next year, BOJ watchers say.

Private-sector economists believe the BOJ is likely to ignore political resistance and tighten credit, raising the overnight call rate from 0.25 percent to 0.50 percent, before the U.S. Federal Reserve begins cutting rates there.

If the BOJ does raise rates, it would be the second rate hike by the central bank since July 14, when it raised the key short-term rate to 0.25 percent from near zero for the first time in six years.