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16h ago

BOJ Poised to Hold Rate at 0.5% as Inflation Cools and Markets Await Ueda

Economists increasingly expect the next increase to slip into early 2026.

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Voters angry about rising rice costs have deserted the long-dominant ruling Liberal Democratic Party
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Overview

  • Policymakers are expected to leave the short-term rate at 0.5% when the meeting concludes Friday, with the decision due between 0230 and 0330 GMT.
  • Governor Kazuo Ueda is set to speak later in the morning, and investors will parse his remarks for guidance on the path toward future hikes.
  • August core CPI slowed to 2.7% year on year, a nine‑month low, while the BOJ’s core‑core gauge eased to 3.3%.
  • MUFG now projects the next 25bp move in January 2026, and a Reuters poll shows most economists see tightening by early 2026 rather than October.
  • Analysts cite uncertainty from U.S. tariffs and a softer American outlook as key risks, even as rice inflation eased to 69.7% from July’s 90.7%.