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1h ago

BOJ Split Deepens as Board Weighs Near-Term Rate Hike, Raising Odds of October Move

Data due in early October will steer the timing.

Japanese national flag hoisted atop the Bank of Japan headquarters building is seen between traffic signals in Tokyo, Japan, January 23, 2025. REUTERS/Issei Kato/File Photo
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 Bank of Japan kept its policy rate at 0.5% on Sept. 18–19, with two of nine board members unsuccessfully proposing a hike to 0.75%.
  • A newly released summary shows members debated a near-term increase, including one view that it may be time to consider another hike after more than six months.
  • Market pricing implies roughly a 50% chance of a move in October, and a Reuters poll shows most economists expect a 25-basis-point increase by year-end.
  • Governor Kazuo Ueda remains cautious even as a hawkish bloc led by Naoki Tamura and Hajime Takata gains influence on the board.
  • Policymakers are watching the Tankan business survey on Oct. 1 and regional branch reports on Oct. 6, while assessing U.S. tariffs, global growth risks, and yen weakness near 150 per dollar.