Overview
- The decision due Friday is widely expected to take the policy rate to about 0.75%, a 30‑year high that markets have largely priced in.
- Attention is shifting to Ueda’s press conference for clues on the sequencing of future moves, with officials seen avoiding explicit terminal‑rate signals.
- Even after the hike, the BOJ judges real interest rates to be negative, reinforcing a gradual approach to normalization.
- Long‑dated JGB yields sit near multi‑year highs around 2% and Japan’s economy contracted in the third quarter, factors that heighten caution.
- Market pricing points to a possible follow‑up hike in mid‑2026, though some analysts favor October 2026, and sharp yen moves could pull the timeline forward.