The Bank of Japan raised its policy rate by 0.25% on 18 September, signaling an acceleration in the pace of rate hikes and a change in the policy phase. The yen weakened in two stages after the announcement, raising questions about the Bank’s independence.
At its monetary policy meeting on 18 September, the Bank of Japan raised its policy rate by 0.25%. This was an additional rate hike approximately 3 months after the previous hike in June, and the Bank explained that the pace of rate hikes was accelerating and that policy conditions had entered a new phase. The Bank stated that it would reduce monetary accommodation in line with the likelihood of inflation reaching 2%, and that if upside risks emerged due to factors such as higher crude oil prices, measures would be needed to prevent inflation from exceeding the target.