Overview

• The hold was widely expected as political uncertainty deepened following Prime Minister Shigeru Ishiba's resignation and an LDP leadership vote set for October 4.
• Investors are watching Ueda's press conference for guidance on the timing and conditions for any further increases.
• The decision follows a U.S. Federal Reserve rate cut this week, adding a new external factor for Japan's policy calculus.
• A Quick/Nikkei survey found unanimous expectations for no change in September, with about 60% forecasting a hike by year-end.
• Since exiting negative rates in March 2024, the BoJ has delivered three hikes through January, with further moves slowed by tariff risks from President Donald Trump even as a recent Tokyo–Washington trade deal eased some concerns.