Bank of Japan (BOJ) policymakers agreed to maintain interest rates at 0.25% during their October meeting but indicated readiness to raise rates if economic conditions align with forecasts, according to minutes released on Tuesday. While the BOJ projects inflation to hover around its 2% target in the coming years, some board members expressed concerns over global uncertainties, urging a cautious approach to tightening monetary policy.
The nine-member board acknowledged that gradual rate hikes would continue if economic and price projections materialize. However, several members emphasized the need to monitor risks from overseas economies, notably the United States, and volatile markets. "We must guide policy carefully amid rising uncertainties both domestically and internationally," one policymaker remarked, justifying the decision to hold rates steady in October.
The BOJ maintained this stance in December, opting to await further data on wage growth and broader economic conditions before proceeding with additional rate adjustments. The central bank is also seeking clarity on U.S. president-elect Donald Trump's economic policies, which could influence global markets.
Meanwhile, today Japanese Finance Minister Katsunobu Kato reiterated concerns over the yen’s sharp depreciation, warning speculators that authorities stand ready to intervene. Speaking at a press conference, Kato emphasized the importance of stable currency movements reflecting economic fundamentals.
"The government remains vigilant regarding foreign exchange moves, and we are prepared to act against excessive volatility," Kato stated. His remarks follow last week’s stronger warnings about the yen's rapid decline, which he described as "alarming."