BOJ Hikes Rate Amid Global Policy Shifts
The Bank of Japan (BOJ) raised its benchmark interest rate in a split decision after two days of meetings. The decision was predicted by all economists surveyed by Bloomberg, with the BOJ lifting its policy rate by a quarter point to 1.25 percent yesterday.
Japan's currency slipped about 1 percent to ¥157.54 against the dollar during Governor Kazuo Ueda's post-decision briefing, despite his assertion that the BOJ needed to avoid letting prices deviate above target and harming the economy.
Two board members voted against the decision, with Daiwa Securities senior economist Kento Minami stating that the market took this as dovish relative to what had been priced in. However, Ueda emphasized that the BOJ's assessment of the economy, prices, and financial conditions remains hawkish, indicating a faster pace of rate hikes than before.
The rate hike marks the shortest interval between rate hikes since 1990, when the central bank's rapid policy tightening played a key role in bursting Japan's asset bubble. It was the sixth rate increase under Ueda, the most by any BOJ chief in at least half a century, and came after pressure from US Secretary of the Treasury Scott Bessent to push up rates.