BOJ Holds, Ueda Signals Gradual Path to Neutral Rate
Bank of Japan Governor Ueda held rates but signaled more hikes are coming, with the rate still below neutral. The BOJ also announced it will nearly triple ETF sales to ~¥860B/year, which Ueda says will have limited market impact.
What we know
Ueda's post-meeting comments dominated macro feeds. He stated the rate remains below neutral and the BOJ wants to bring it to neutral appropriately while adjusting at the right timing so risks don't manifest. He emphasized wage growth as a key prerequisite for embedded 2% inflation and said no victory declaration is forthcoming. Meanwhile, an account on X reported from the BoJ that ETF sales will accelerate to ~¥860B from ¥330B, and board member Takata's proposal to raise the short-term rate to 1.5% was rejected by the board.
How the story developed
Bank of Japan Governor Ueda held rates but signaled more hikes are coming, with the rate still below neutral. The BOJ also announced it will nearly triple ETF sales to ~¥860B/year, which Ueda says will have limited market impact.
Bank of Japan Governor Ueda delivered extensive guidance indicating further rate hikes are on the table at each meeting, with core inflation near the 2% target, though inflation expectations remain weakly anchored and wage growth sustainability is still being assessed.
The Bank of Japan maintained current policy at its latest meeting while signaling further rate hikes remain possible. The yen strengthened and the Nikkei fell in immediate reaction, with JGB yields dropping across the curve.
The Bank of Japan held rates steady at 1.25% in an 8-1 vote, while big tech earnings misses and tighter monetary policy outlook weighed on equities and gold simultaneously.
By the Global Eye 24 desk, with AI assistance. Updated as the story develops. Spot an error? Write to corrections@globaleye24.com.