The Bank of Japan raised its policy rate to approximately 1.25%, proceeding with an additional rate hike just three months after its previous increase. It signaled an approach aimed at responding to changing conditions in light of the inflation outlook and market trends.
At its monetary policy meeting on the 18th, the Bank of Japan decided to raise its policy rate to around 1.25%. The additional hike came just three months after the previous increase.
The decision was based in part on the view that the risk of inflation being pushed higher than expected had increased, due to continued rises in crude oil prices and the yen's ongoing depreciation.
At a press conference, Governor Ueda Kazuo (植田和男) said the likelihood had increased that the underlying inflation rate would exceed the 2% target, explaining that monetary policy had entered a new phase.
At the same time, concerns were expressed that higher interest burdens on companies and households could slow the economy, underscoring the need to assess the impact while taking market trends, including exchange rates and long-term interest rates, into account.