The Bank of Japan raised its policy rate from around 1.0% to around 1.25% at its monetary policy meeting on the 18th, shortening the interval from the previous hike in June to 3 months and accelerating the pace of tightening. It was the shortest interval between rate hikes since Governor Ueda (植田) took office, signaling the central bank's intention to prioritize price stability.
The Bank of Japan held a monetary policy meeting and decided to raise its policy rate from the current level of around 1.0% to around 1.25%. The move shortens the interval since the previous hike in June to 3 months, bringing the rate to a projected 31-year high, as the central bank seeks to curb price increases driven by higher crude oil prices and yen depreciation.
The focus will be on whether accelerating the pace of rate hikes can balance the impact on the economy with price stability. After the meeting, Governor Ueda (植田) is scheduled to hold a press conference to explain the reasons for the decision.
Of the 9 policy board members, 2, Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野), opposed the rate hike. The governor indicated that the central bank intends to continue raising rates at a pace of roughly once every 6 months, while remaining mindful of avoiding an economic slowdown.
Central banks in Europe and the United States also raised rates in September amid concerns about inflation, signaling a global shift into a rate-hike cycle. The United States is stepping up pressure on the Bank of Japan over what it views as excessive yen depreciation.