Analysts react to BOJ decision to keep rates steady
TLT•TLT•TLT•TLT•The Bank of Japan held its short-term policy rate at 1.25% in an 8-1 vote, revised up its inflation forecast and announced faster ETF sales. Analysts said the outlook could support a rate hike in December, though views differed on the timing and the decision’s market impact.
The Bank of Japan kept its short-term policy target at 1.25% on Friday in an 8-1 vote. Board member Hajime Takata dissented. The BOJ revised up its inflation forecast and said underlying inflation had reached a level generally consistent with its 2% target.
Several analysts said the BOJ’s inflation outlook strengthened the case for a rate hike, with some viewing December as a credible opportunity. Others said the bank was under no pressure to rush and could remain data-dependent. Analysts also cited the BOJ’s decision to accelerate ETF sales; one estimate put the time needed to unwind its holdings at 43 years.
