BOJ raises policy rate to 0.25% in July monetary policy meeting

• Prior 0.10%
• Nakamura, Noguchi dissented to decision on rates
• To taper bond purchases to ¥3 trillion as of Q1 2026
• That means to reduce scheduled monthly bond buying by around ¥400 billion each quarter
• Bond tapering vote was unanimous
• To review bond tapering plan in June next year via midterm review
• Underlying inflation expected to increase gradually
• Japan economy recovering moderately although some weakness has been seen
• If outlook for economic activity and prices are realised, will continue to raise policy rates and adjust degree of monetary accommodation accordingly

It was the worst kept secret after the BOJ decidedly leaked the decision to the press yesterday already. The yen has whipsawed on the decision but USD/JPY is now settling a bit higher at around 153.20 levels, compared to 152.60 before the decision.

As for the dissenters, Noguchi argued that he is not convinced by recent economic conditions.

This article was written by Justin Low at www.forexlive.com.