JP:\u00a0BoJ interest rate decision<\/p>\n
Date:\u00a0Thursday, 31 July at no set time\u00a0<\/p>\n
At its last monetary policy meeting in mid-June, the BoJ kept its key policy rate on hold at 0.50% for a third consecutive meeting.\u00a0The decision to hold rates was widely expected, as was its move to cut growth and inflation forecasts, reflecting uncertainties surrounding US tariffs and their threat to Japan\u2019s export-driven economy.<\/p>\n
Additionally, the BoJ elected to decelerate the pace of its balance sheet drawdown in 2026, prompted by a period of unusual volatility<\/a> in the Japanese bond market<\/a>, which saw yields<\/a> on Japanese government bonds<\/a> soar to record highs.<\/p>\n Despite news this week that the US and Japan reached a trade agreement reducing uncertainty, next week\u2019s BoJ meeting is being overshadowed by political uncertainty surrounding the future of Prime Minister Ishiba, following the Liberal Democratic Party election loss over the weekend.<\/p>\n Probability markets, such as Polymarket, now assign a 77% chance that Ishiba will be replaced as leader of the Liberal Democratic Party, with Sanae Takaichi and Shinjiro Koizumi viewed as the leading candidates.<\/p>\n While the identity of the next leader is important, the recent upper house election loss significantly constrains the new leader\u2019s autonomy.<\/p>\n The need to form coalitions with smaller parties \u2013\u00a0like the Democratic Party for the People, which saw support surge in the upper house election due to its push for consumption tax cuts, or the ‘Japanese First’ anti-immigration party Sanseito, which won 14 seats to become the chamber\u2019s third-largest party \u2013\u00a0will shape policy and market outcomes.<\/p>\n Given this political uncertainty, combined with recent softer inflation data, the BoJ is likely to keep rates on hold next week at 0.50%, before possibly raising rates again in December.<\/p>\n BoJ policy rate chart<\/p>\n","protected":false},"excerpt":{"rendered":"JP:\u00a0BoJ interest rate decision Date:\u00a0Thursday, 31 July at no set time\u00a0 At its last monetary policy meeting in…\n","protected":false},"author":2,"featured_media":22285,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[84,467,56,54,55],"class_list":{"0":"post-22284","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-markets","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/22284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=22284"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/22284\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/22285"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=22284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=22284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=22284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}