At its September monetary policy meeting, the Bank of Japan implemented a 25 bp rate hike, raising the policy rate to around 1.25%. The statement specified the reasons for the rate hike and maintained the policy of continuing to raise rates. Governor Ueda pointed to a change in the policy phase and emphasized that rate hikes would be discussed at every meeting.
The Bank of Japan held a monetary policy meeting on 17 and 18 September and, as the market had expected, decided to raise rates by 25 basis points. Policy Board members Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野) opposed the rate hike, but there was no proposal for an additional 50 bp increase.
The statement cited the economy and prices developing in line with the Bank of Japan's outlook, the risk that underlying inflation would exceed 2%, and accommodative financial conditions as reasons for the rate hike. It maintained the policy of raising interest rates in response to economic, price and financial developments and stabilizing inflation at around 2%.
Governor Ueda Kazuo (植田和男) referred to a change in the policy phase and said that stabilizing underlying inflation at around 2% is now important. He said the pace of rate hikes would not be set for a specific period and would continue to be discussed at every meeting, while indicating that a rate hike exceeding 25 bp could not be ruled out depending on price developments.
As its outlook for next year's schedule, Sumitomo Mitsui DS Asset Management has maintained its forecast for rate hikes by the Bank of Japan in January and June, and considers a deterioration in the Middle East situation and higher crude oil prices risks that warrant attention.
As supplementary information on this matter, this article reproduces a report by Sumitomo Mitsui DS Asset Management's Ichikawa (市川).