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1h ago

Bank of Japan Set to Hold Rates as Markets Watch for Signals on Next Moves

Investors are focused on guidance from Governor Ueda about the timing of further tightening.

Japanese national flag hoisted atop of the Bank of Japan headquarters building is seen between traffic signals in Tokyo, Japan January 23, 2025. REUTERS/Issei Kato/File Photo
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The Japanese national flag waves at the Bank of Japan building in Tokyo, Japan March 18, 2024. REUTERS/Kim Kyung-Hoon/File Photo
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Overview

  • The two-day meeting concludes Thursday with economists widely expecting the policy rate to stay at 0.5%.
  • The board remains divided, and Naoki Tamura and Hajime Takata are seen likely to dissent again in favor of a hike to 0.75%.
  • Political dynamics after Prime Minister Sanae Takaichi’s inauguration have lowered odds of an immediate move given her preference for looser policy.
  • Underlying inflation has exceeded the 2% target and wages are inching higher, and Bank of America now projects a 25 basis-point hike in January 2026.
  • Yen weakness and U.S. tariff risks frame the debate, with traders eyeing an announcement expected around 02:30–03:30 GMT and U.S. Treasury Secretary Scott Bessent urging faster hikes.