At a press conference held by the BOJ governor, it was pointed out that the policy phase had changed, and the pace of rate hikes accelerated amid growing risks of higher prices. The BOJ decided to raise its policy rate from 1.00% to 1.25%, marking the first increase in 3 months since June.
At a press conference following its monetary policy meeting, the BOJ said it recognized that “the policy phase had changed” compared with its previous stance, and explained that underlying inflation was approaching around 2%. In response, it decided to raise the policy rate from the current 1.0% to 1.25%.
The BOJ said upside risks to prices were increasing due to higher oil prices and other factors, indicating that it was prepared to raise rates at a faster pace than before. Governor Ueda (植田) said the BOJ would continue its deliberations while examining the likelihood of achieving its economic and price outlooks and the associated risks, and added that it was not assuming any specific timing.
This hike will be the sixth since the end of large-scale monetary easing in March 2024. The new rate is scheduled to take effect on the 24th, with adjustments expected to continue based on the price outlook and risks in unprecedented circumstances.