At its monetary policy meeting on 18 September, the BOJ decided by a 7-2 majority to raise its policy rate target from around 1.0% to around 1.25%. The rate hike, the first in three months, will bring the rate to its highest level since 1995 and was reportedly driven by the risks of higher inflation.
The BOJ decided to raise its target for the uncollateralized overnight call rate from around 1.0% to around 1.25%.
The rate hike, the first since June, will bring the rate to its highest level in approximately 31 years, since September 1995.
At the meeting, board members Asada Toichiro (浅田統一郎) and Sato Ayano (佐藤綾野) opposed the decision. Asada argued that rates should be left unchanged while inflation remained below 2%, while Sato reportedly opposed a rate hike at this time on the grounds that it was not appropriate.
In its statement, the BOJ said that the economy and prices were developing in line with its outlook, and indicated that it would continue to place importance on stabilizing underlying inflation at around 2%.
The statement said that financial conditions would remain accommodative, and set out a policy of adjusting the degree of monetary easing while continuing to raise the policy rate.