MNI BRIEF: BOJ Keeps Rate At 0.25%; Rate Hike Mode Intact
MNI (TOKYO) - The Bank of Japan board on Thursday left its policy interest rate at 0.25% as the outlook for the economy and prices, as well as financial markets, remained uncertain, and despite economic activity and prices continuing as expected.
Heightened uncertainties over the domestic political situation after Sunday’s election and potentially volatile financial markets after the U.S. presidential election on Nov. 5 drove the decision, which was largely anticipated. (See MNI BOJ WATCH: Board To Hold, Monitor Markets, U.S. Economy)
The Bank's focus has shifted to how financial markets, particularly the dollar/yen rate, and stock prices evolve, and whether the upside risk to prices increase again in December.
Attention should be paid to whether Governor Kazuo Ueda reiterates that the Bank has "sufficient time" to watch economic activity and risk developments, and not rule out a rate hike in December at a post-meeting press conference.