At its September monetary policy meeting, the BOJ raised its policy rate from 1% to 1.25%, marking what has been described as a change in the policy phase. Reports have examined the factors behind Japan, the US and Europe all raising rates, as well as Japan’s circumstances.
At its 17–18 September policy meeting, the BOJ raised its guidance target for the uncollateralized overnight call rate from 1% to 1.25%. Since the end of negative interest rates, the intervals between rate hikes had been shortening, and this time the interval narrowed further.
At a press conference, Governor Ueda Kazuo (植田和男) said there was a risk that underlying inflation could overshoot the 2% target, citing the increased risk of an upside surprise in inflation as the reason for saying that “the policy phase has changed.” He indicated that if inflation risks intensify, the BOJ would not rule out consecutive, substantial rate hikes.
The article is available to paid subscribers, with further coverage and supplementary information expected to be provided. It organizes the factors Japan, the US and Europe had in common when they raised rates around the same time, as well as the circumstances unique to Japan.