Opinions calling for an early additional rate hike were prominent at the BOJ’s October meeting. The Bank held its policy rate at around 1.25% and deferred a rate hike to assess its impact.
The BOJ released its Summary of Opinions from its Monetary Policy Meeting held on 29–30 October. On the question of an additional rate hike, many policy board members expressed support for early implementation, saying that the Bank should “avoid being excessively cautious and implement a hike when it can.”
The BOJ implemented rate hikes in June and September, but deferred a hike at its October meeting to assess the impact on the economy and prices. As a result, the interest rate was held at around 1.25%.
One member referred to the concept of the neutral interest rate, while the meeting also indicated a cautious approach to be determined based on future economic indicators. As a result, the Bank’s future policy operations are expected to remain a focus of attention.
There was broad agreement that price trends and growth would be the two important factors in determining the Bank’s future course. In particular, views are expected to diverge on the timing and scale of any additional rate hikes, depending on future data.