At its 18 September policy meeting, the Bank of Japan raised the policy rate by 0.25 percentage points, and Governor Ueda (植田) spoke of a “shift in the policy phase” at his press conference. The latest rate hike came about three months after the previous one, and has been explained as reflecting an acceleration in the pace of rate hikes.
At its monetary policy meeting on 18 September 2024, the Bank of Japan raised the policy rate by 0.25 percentage points. The additional hike, implemented about three months after the previous rate increase in June, has focused attention on an acceleration in the pace of rate hikes. Governor Ueda (植田) was said to have used the expression “shift in the policy phase” at his press conference.
According to the Bank of Japan’s explanation, as the underlying inflation rate approaches 2%, the risk of inflation exceeding expectations is emerging due to factors such as rising crude oil prices. The Bank has referred to a policy of continuing gradual rate increases as a preventive measure. This was explained as the background to the shift in the policy phase.
The current situation has created a need to take account of upside risks to prices, and the view was expressed that monetary policy needs to respond symmetrically in both directions. As a result, the view was suggested that the Bank will maintain a cautious stance going forward while continuing to raise interest rates.