The BOJ delivered an additional rate hike at its September meeting, the first in three months. The market is focused not on the rate hike itself, but on whether the global economy can maintain a soft landing.
At its September Monetary Policy Meeting, the BOJ delivered an additional rate hike of 0.25 percentage points, and interest rates entered an upward trajectory. The market’s fundamental focus is not the rate hike itself, but whether the global economy can maintain a soft landing.
Following the July meeting, the policy rate had been raised in June from approximately 0.75% to approximately 1.0%, before being left unchanged in July. During the summer, the yen weakened against the dollar to the ¥163 range. Alongside developments surrounding intervention by Japan and the United States, the rise in import prices became visible in persistently high corporate prices. Remarks related to overseas factors served as a catalyst for bringing forward the timing of the rate hike, changing market views.
The market is focused more on the feasibility of a soft landing than on the level of interest rates. The outlook for policy coordination between Japan and the United States, as well as speculation over the timing of the rate hike, is said to have influenced market conditions. Key areas of focus for future developments include whether the timing will be in early autumn or at year-end, and domestic price and wage trends.