The Bank of Japan announced its decision to raise the policy rate to around 1.25% and indicated that it would accelerate the pace of rate hikes while maintaining accommodative financial conditions.
At its Monetary Policy Meeting on the 18th, the Bank of Japan decided to raise its target for the uncollateralized overnight call rate to around 1.25%. The Bank said financial conditions remained accommodative and indicated that it would continue raising rates.
The latest rate hike was 0.25 percentage points, bringing the policy rate to its highest level in 31 years, since 1995. It was the sixth rate hike under Governor Ueda Kazuo (植田和男), including the lifting of negative interest rates in March 2024, and the BOJ's first hike in three months.
The vote by the 9 Policy Board members was 7 in favor and 2 opposed. The dissenting votes came from Policy Board members Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野). Asada called for rates to remain unchanged, while Sato argued that a rate hike at this time was inappropriate.
The yen weakened in the market, briefly moving to the 157 level against the dollar. Nikkei 225 futures on the Osaka Exchange rose. The BOJ reiterated its policy of appropriately adjusting the pace of rate hikes and the degree of monetary accommodation based on its outlook for the economy and prices.