The move meant the BoJ joined the US Federal Reserve and the European Central Bank in tightening monetary policy this month, as central banks attempt to curb the impact of rising prices, linked to the conflict in the Middle East.<\/p>\n
The Bank of England on Thursday voted to leave UK interest rates on hold<\/a> at 3.75% but warned they could soon rise amid the fallout from the Iran war.<\/p>\n The BoJ policy committee\u2019s vote to raise rates was not unanimous \u2013 with two of the nine board members dissenting against the increase.<\/p>\n Kazuo Ueda, the governor of the BoJ, would not rule out the possibility of back-to-back rate rises by the bank\u2019s policy committee.<\/p>\n \u201cThat depends on how price conditions develop,\u201d he said. \u201cThere could be various possibilities. We shouldn\u2019t rule anything out. We\u2019re at a phase where we need to look at various data carefully. But that doesn\u2019t mean we can move slowly. We will analyse data carefully and take timely action as needed.\u201d<\/p>\n The BoJ\u2019s policy committee meets eight times a year, roughly once every six weeks, and Ueda said there is no set plan for the timing of any future potential increases in the rate.<\/p>\n \u201cAs for the pace of future rate hikes, we don\u2019t have any pre-set idea in mind such as once every three months,\u201d he said. \u201cWe will determine at each policy meeting how best to ensure underlying inflation stabilises \u200cat 2%.\u201d<\/p>\n Ueda said the BoJ has changed its policy of trying to boost inflation in the economy to focusing on ensuring it does not go above its target of 2%. In August the rate of inflation in Japan was 1.9%.<\/p>\n \u201cUp until \u200bnow, our short-term \u200cpolicy focus was \u200bto push \u200bup underlying inflation from levels below 2%,\u201d he said. \u201cNow, underlying inflation is approaching 2%. If risks of underlying inflation overshooting 2% materialise, that could have a negative impact on Japan\u2019s economy. It\u2019s important to stabilise underlying inflation at 2%.\u201d<\/p>\n The BoJ has been raising rates since 2024, when it lifted its base rate out of negative territory. It has been under pressure to raise borrowing costs as the yen weakened steadily against the dollar this year. The Japanese currency weakened more than 1% against the dollar on Friday.<\/p>\n Earlier this month, Scott Bessent, the US Treasury secretary, warned currency traders not to bet against the yen, after an intervention by the US and Japan at the end of July to stabilise the weakening Japanese currency.<\/p>\n \u201cI have asymmetric information. I am the house now,\u201d Bessent said, adding that he had \u201cpretty good insight\u201d into what Japanese policymakers were going to do. \u201cYou can bet against me if you want.\u201d<\/p>\n In late July the US Treasury moved to sell at least $10bn in euros<\/a>, without informing the European Central Bank, to buy yen to arrest its slide to a 40-year low.<\/p>\n
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