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2025-10-30 17:04:16
[Cautious Game Amidst the Bank of Japan's Policy Stall] ⑴ The Bank of Japan (BOJ) again kept interest rates unchanged, compressing the window for policy tightening to its final meeting in December. ⑵ The BOJ maintained its overnight call rate target at 0.5%, continuing the policy pause since the January rate hike. ⑶ Governor Kazuo Ueda emphasized the need to observe the developments in next year's spring wage negotiations and overseas economic risks, including the uncertainty brought about by Trump's tariff rhetoric. ⑷ The BOJ kept its economic forecasts largely unchanged, suggesting policymakers are in no hurry to raise rates again. ⑸ Policy Board members Hajime Takada and Naoki Tamura again proposed raising rates to 0.75%, but this was not endorsed by other members. ⑹ The latest forecasts show that core inflation will reach 2.7% in the fiscal year ending March 2026, followed by 1.8% and 2.0% in the following two years. ⑺ Reflecting the cautious policy stance, the yen fell to around 153.80 against the dollar. ⑻ The new government's advocacy of fiscal expansion and loose monetary policy further raised the political threshold for a BOJ rate hike. (9) The central bank simultaneously raised its economic growth forecast for the current fiscal year to 0.7%, and projected growth rates of 0.7% and 1.0% for the next two years, respectively. (10) Analysts believe that although domestic conditions support an interest rate hike, the central bank will continue to weigh the pros and cons rather than anticipate the timing of the action.
