Bank of Japan Maintains Rates Amid ETF Unwinding and Policy Uncertainty
Originally Published 3 months ago — by ING Think
The Bank of Japan maintained its policy rate at 0.5% with two dissenting votes favoring a hike, signaling potential future rate increases amid rising inflation and economic confidence. The BoJ announced plans to gradually reduce ETF and J-REIT holdings, while political uncertainties and US monetary policy developments could influence the timing of rate hikes. Despite slowing headline inflation due to subsidies, core inflation remains above target, supporting the case for a rate increase possibly in October. The yen's outlook remains bullish with expectations of a rate hike and US Fed rate cuts, potentially pushing USD/JPY towards 145.