MNI BRIEF: BOJ keeps Policy Rate at 0.25%, January Hike Eyed
MNI (TOKYO) - The Bank of Japan Board on Thursday decided 8-to-1 to keep the unsecured overnight call loan rate at 0.25%, increasing chances of a January hike after ascertaining wage data and the outlook for the U.S. economy.
Naoki Tamura, former bank executive, proposed to hike the rate to 0.50%, citing the increasing upside risk to prices, but his proposal was defeated by a majority vote.
Market players are focused on how BOJ Governor Kazuo Ueda refers to the outlook for monetary policy and the U.S. economy following the rate cut by the Federal Reserve at a post-meeting press conference.
Thursday’s decision highlighted policymakers reluctance to raise the policy rate. They do not see a great immediate upside risk to prices and would prefer to ascertain wage-hike trends and the evolving U.S. economy and global financial markets. (See MNI POLICY: BOJ Unaffected By Weak Underlying Inflation)
The policymakers are also focused on regional reports at the branch managers’ meeting on Jan. 9 to scrutinise the foundation for smaller-firm wage hikes.