Bank of Japan raises policy rate to 0.25%, slows bond purchases, signaling policy normalization

From Investing.com: 2024-07-31 06:29:00

The Bank of Japan raised its policy rate to 0.25% and announced a halving of JGB purchases by 1Q26, signaling policy normalization. Growth outlook was slightly trimmed for FY24, inflation outlook above 2% until FY25. Recent data shows a virtuous cycle of wage growth, consumption, and inflation, despite concerns of weak growth. Industrial production contracted, but BoJ focuses on recovery in inflation and consumption. Some argue the BoJ is rushing, but recent data supports their expectations. BoJ hints at another rate hike, as GDP and inflation forecasts are slightly higher than expected. Governor Ueda hints at further rate hikes if growth and inflation align. FX: JPY weakens, technical factors crucial for price action.



Read more at Investing.com: Bank of Japan Surprises With 15bp Hike, But Bond Purchase Slowdown Only Gradual