The Bank of Japan decided at its monetary policy meeting on the 18th to raise its policy rate to 1.25%, delivering an additional rate hike for the first time in 3 months since June. This puts the BOJ's pace of rate increases under Governor Ueda Kazuo (植田 和男) at its fastest, prompting markets to look to the data for clues about when the next hike will come.
The Bank of Japan decided at its monetary policy meeting on the 18th to raise its policy rate to 1.25%. This was an additional rate hike after a 3-month interval, marking the fastest pace at which the BOJ under Governor Ueda Kazuo (植田 和男) has moved to this level.
Following the decision, markets have increasingly focused on the data in assessing the timing of the next rate hike. The yen remains persistently weak in foreign exchange markets, and this has been cited as supporting the case for a rate hike.
To read the BOJ's next move, continued monitoring of indicators such as upside risks to inflation, wage trends and the response of domestic demand will be important. Investors and companies are closely watching the release of future data.
Although markets remain highly focused on the yen's depreciation and price trends, many observers believe that the merits of further rate hikes by the BOJ will depend on developments in the official data.