The Bank of Japan raised its policy rate by 0.25 percentage points to 1.25% on 18 September. The latest hike was described as an acceleration in the pace of rate hikes, with the response to risks arising as inflation approaches 2% cited as a contributing factor.
At its monetary policy meeting on 18 September, the Bank of Japan raised its policy rate by 0.25% to 1.25%. Following the previous meeting in June, the implementation of an additional rate hike after roughly 3 months suggested an acceleration in the pace of rate hikes.
BOJ Governor Ueda Kazuo (植田 和男) explained that the policy phase could change, citing the possibility that upside risks would expand due to factors such as higher oil prices as underlying inflation approached 2%.
The yen weakened in the market after the decision, but some views were negative on the prospect of a substantial acceleration in the pace of future rate hikes. The BOJ and monetary authorities are reportedly continuing to face a situation in which they must closely monitor developments in the FX market, and a cautious stance was suggested regarding the outlook at the October policy meeting and consecutive rate hikes.