Japan and the United States both implemented rate hikes, with the Bank of Japan raising its policy rate to a 31-year high. The U.S. Federal Reserve's policy direction and the yen's weakening trend are occurring in parallel, drawing attention to the course of monetary policy going forward.
The Bank of Japan held a monetary policy meeting on 18 September and raised its policy rate from around 1.0% to around 1.25%. This brought the rate to a 31-year high, following a hike just 3 months after the previous one.
Around the same time, the Federal Reserve raised its policy rate by 0.25%, strengthening expectations that rate hikes would continue in both Japan and the United States. In the foreign exchange market, the dollar-yen rate at one point fell to near ¥157, but later also showed a move back into the ¥156 range.
Market participants have cited the impact of price trends and are closely watching the continuation of yen weakness and high prices, as well as the Bank of Japan's response going forward. Statements were also reported indicating that the possibility of a rate hike at the December monetary policy meeting would not be ruled out, leading to divided views on the pace of future hikes.