At its September monetary policy meeting, the Bank of Japan raised the uncollateralized overnight call rate by 0.25% to 1.25%. The decision was approved by a majority vote of 7 to 2.
At its monetary policy meeting held on 17 and 18 September, the Bank of Japan raised the uncollateralized overnight call rate by 0.25% to 1.25%. The decision was approved by a majority vote of 7 to 2, with Committee Members Asada (浅田) and Sato (佐藤) voting against.
According to explanations from the government and the Bank of Japan, prices remain below 2% when temporary factors are excluded. At the same time, it was indicated that overall economic and price developments have not accelerated significantly compared with the past, while there was recognition that policy normalization should be expedited.
At a press conference, Governor Ueda (植田) said that the policy phase had changed, and stated that the focus would shift from the previous objective of raising underlying inflation to the importance of stabilizing it at around 2%. The Bank indicated that future interest rate policy would place greater emphasis on decisions based on price developments.
One factor behind the dissenting votes was the view that it was appropriate to question whether raising rates was warranted while the current consumer price index excluding fresh food remained below 2%. The implications for economists’ interpretations and the policy line of the reflationist camp were also discussed.