At its policy meeting, the BOJ indicated that it would keep the policy rate, the uncollateralized overnight call rate, at around 1.25%, while maintaining consistency with the 2% inflation target. The decision was based on the impact of the rate hike at the previous September meeting on the economy and prices.
The BOJ decided at its monetary policy meeting to keep the policy rate, the uncollateralized overnight call rate, at around 1.25%. It thereby reiterated its stance toward achieving an economic recovery and its price stability target. The decision was in line with market expectations, while the timing of any further rate hikes remains uncertain.
At the same time, the BOJ emphasized consistency with its 2% inflation target by describing it as “broadly consistent.” Whether price trends and wage growth will move toward 2% will depend on forthcoming economic data, and market participants share the view that the current policy rate could remain in place for an extended period.
The statement at this meeting again indicated that the BOJ would closely monitor the impact of the rate hike at the previous September meeting on the economy and prices. The prevailing interpretation is that there has been no change in its policy of seeking to balance price stability and growth while carefully observing the effects on financial markets and the real economy.