The Bank of Japan has settled on a plan to raise its policy rate from the current 1.0% to 1.25% at its monetary policy meeting on the 17th-18th. The additional hike, the first in 3 months, is aimed at containing upside inflation risks stemming from higher crude oil prices and a weaker yen.
The Bank of Japan has settled on a plan to raise its policy rate from 1.0% to 1.25% at its monetary policy meeting on the 17th-18th. The hike is expected to mark the shortest interval between rate increases since March 2024, as the Bank proceeds with a reassessment of the rate-hike cycle.
The Bank has emphasized its aim of containing upside inflation risks against a backdrop of higher crude oil prices and a weaker yen. The proposal from the Bank's executive leadership is expected to win majority support from the 9 policy board members.
The situation points to oil prices rising again and corporate goods prices increasing in the 7% range, with reports indicating an urgency to respond to inflationary pressures.
The decision at this meeting could influence the direction of future monetary policy operations.