The Bank of Japan raised its policy rate by 0.25% at its monetary policy meeting, setting it at 1.25%. The names of the 2 policy board members who voted against the decision were specified in the statement, putting the outlook for further rate hikes in focus for the market.
At its monetary policy meeting held through the 18th, the Bank of Japan raised its policy rate by 0.25% and set the target level at 1.25%. In the market reaction, equities rose, while the foreign exchange market saw the yen weaken and the dollar strengthen. The meeting statement named the 2 policy board members who voted against the decision, identifying both of them as policy board members regarded as reflationists: Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野).
The fact that the dissenting votes were disclosed as expected is seen as likely to affect assessments of the likely vote count at future meetings. Regarding the Bank of Japan's future policy management, the composition of the 2 votes at the next policy meeting is viewed as an important clue. Since policy decisions are made by a 9-member vote, the view is that discussions will proceed on the assumption that the 2 reflationists are present.
As for the timing of the next rate hike, December is the baseline outlook in light of the risk wording in the statement. Depending on the US Federal Reserve's policy, however, a January rate hike could also be discussed, with developments expected to hinge on interest-rate trends in Japan and the United States. Governor Ueda also used the phrase "the policy phase has changed" at his press conference, suggesting a transition to a phase aimed at stabilizing inflation at 2%.