The Bank of Japan (BOJ) raised its target interest rate by a quarter point to 0.5%, marking a 13-year high, as expected by nearly all economists surveyed by Bloomberg News. With an 8-1 vote, officials reaffirmed their commitment to further hikes. Governor Kazuo Ueda emphasized confidence in the policy path and noted upside risks for this year’s economic outlook. The yen gained strength after the rate hike, with analysts predicting at least one more increase this summer. Bond yields rose marginally, reflecting market reactions to the decision.
The BOJ maintained its forecast for steady GDP growth in 2025 and 2026 but updated inflation expectations upward, citing stronger price pressures. The yen’s appreciation after the rate hike added to broader market volatility, while bond yields showed minimal movement. economists continue to weigh when the next rate hike may occur.
The BOJ’s cautious tone in the press conference signals potential dovishness ahead, though markets remain uncertain. Yen gains and bond yield movements hint at mixed reactions to the decision, with implications for future monetary policy and currency performance.
Source: https://www.bloomberg.com/news/live-blog/2025-01-24/bank-of-japan-monetary-policy-decision