The Bank of Japan raised its policy rate from the current 1.0% to 1.25%, marking its first rate hike in 3 months. Against a backdrop of growing upside risks to inflation, including higher crude oil prices, it accelerated the pace of monetary policy normalization. Governor Ueda (植田) is scheduled to hold a press conference that afternoon.
On the 18th, the Bank of Japan decided by a majority vote at its Monetary Policy Meeting to raise the policy rate from the current 1.0% to 1.25%. This was the first rate hike since June, or in 3 months. The decision passed with 7 of the 9 board members in favor and 2 opposed.
Against a backdrop of rising crude oil prices caused by the worsening situation in the Middle East and the resulting upside risks to inflation, the Bank indicated that it had decided to accelerate the pace of monetary policy normalization from its previous gradual approach.
The policy rate increase was positioned as part of continued monetary tightening, with the support of key members including Governor Kazuo Ueda (植田和男). Policy Board members Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野) opposed the decision.
Governor Ueda (植田) is scheduled to hold a press conference that afternoon to explain the background to the rate hike and the direction of policy management going forward.)
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Policy rate
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Raised from the current 1.0% to 1.25%, approved by a majority vote.
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Timing of decision
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First rate hike in 3 months, following the previous hike in June.
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For/Against
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7 in favor; Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野) opposed.
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Press conference
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Governor Ueda (植田) will hold a press conference that afternoon.
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Background
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The pace was accelerated against a backdrop of higher crude oil prices and growing upside risks to inflation.