The decision to maintain the current policy benchmark came through a near-unanimous 8-1 vote, with board member Hajime Takata serving as the sole dissenter. Alongside the rate pause, officials upgraded their inflation forecasts while adjusting the disposal pace of the bank's massive exchange-traded fund portfolio. Outside strategists interpret the stance as a hawkish monitoring period shaped by overseas equity weakness and tighter global financing conditions. Analysts project the central bank may implement its next hike in December or January, eventually reaching an estimated terminal rate of 1.75 per cent.
Key points
Policymakers revised up inflation projections and affirmed their readiness to push borrow…: Policymakers revised up inflation projections and affirmed their readiness to push borrowing costs higher against inflation risks.
Analysts observe no immediate urgency for sudden hikes due to tighter global financial co…: Analysts observe no immediate urgency for sudden hikes due to tighter global financial conditions and yen appreciation.
Market observers expect the benchmark policy rate could climb toward a terminal target of…: Market observers expect the benchmark policy rate could climb toward a terminal target of roughly 1.75 per cent.
Sources checked by our analysis pipeline: 1
Oct 30 : The Bank of Japan kept interest rates steady on Friday, but revised up its inflation forecast and stressed anew its readiness to continue pushing up borrowing costs to forestall mounting inflation risks.
The central bank decided to maintain its short-term policy target at 1.25 per cent by an 8-1 vote. Board member Hajime Takata dissented to the decision.
Governor Kazuo Ueda will hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision.
COMMENTS
HIROFUMI SUZUKI, CHIEF FX STRATEGIST, SMBC, TOKYO:
"Board member Takata dissented, but this is unlikely to be a major market catalyst. The BOJ also announced a revision to the pace of its ETF sales. However, with the disposal of its ETF holdings still expected to take 43 years, the impact on financial markets is likely to be limited.
"A significant shift from its previous assessments, however, was the BOJ's recognition that underlying inflation, excluding temporary factors, had reached its 2 per cent target.
"Recent developments in France and declines in US equities have contributed to a tightening of global financial…
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