Bank of Japan expected to hold rates steady

Fri, 09/20/2024

by Ellie LeTu

Source: WSJ

• Background: BoJ hiked rates by 0.25bps

  • BoJ has enjoyed more than two decades of low to negative interest rates.

  • Surprisingly shifted away this year by hiking rates by 25 basis points twice.

• Steady rates as a response to markets’ reaction

  • BoJ taking a step back to further examine how markets respond to their sudden change in monetary policy.

  • Tighter monetary policy came as a massive surprise to the markets.

    • Set off a downturn in Japanese stocks last month.

• Future plans of rising rates

  • More rate hikes are likely on the way in the future.

  • BoJ leader Kazuo Ueda has reiterated that they plan to lift target rate.

    • Assuming economy and prices develop as projected.