
Bank of Japan pushed its policy rate up to 1.25%, up from 1.00% in June – a 0.25‑point lift that garnered a 7‑2 vote behind Governor Kazuo Ueda.
The decision marks the first rate hike in just three months, the shortest interval since 1990, and signals a pivot toward a new phase focused on preventing inflation from exceeding the 2% target after 13 years of gradual price growth.
Swap contracts now imply a more than 95% probability of another hike by December, while only a 21% chance of an increase on the upcoming October 30 board meeting, a stark jump from the 50‑50 odds that prevailed before the policy summary was released.
A Cabinet Office representative, likely Economic Policy Minister Minoru Kiuchi, cautioned that the board must monitor the impact of the hikes already undertaken, suggesting that the BOJ is wary of any policy misstep.
Market participants now view the BOJ’s stance as firmly hawkish; analysts anticipate that the central bank could raise rates again on October 30, potentially nudging Japanese equities and the yen to react accordingly.