Overview
- The BOJ raised its short-term policy rate by 25 basis points in a unanimous vote, the first increase since January and a further step in policy normalization.
- Officials said real interest rates remain significantly low and signaled that additional hikes are possible depending on economic and price developments.
- Japan’s core CPI was about 3.0% in November, above the 2% target, with the weak yen cited as a key driver of persistent price pressures.
- The yen softened to roughly ¥156 per dollar and 10-year JGB yields climbed to around 2.015%, the highest since 1999, as markets digested the decision.
- Traders are watching Ueda’s press conference for clues on the pace and terminal rate, with some focus on fiscal issuance risks under Prime Minister Takaichi’s stimulus program.