Holds rate steady, signals potential for further policy normalisation
- Bank of Japan (BoJ) left its policy settings unchanged, as expected, but Governor Ueda signaled potential for further monetary policy normalisation. This shows that BoJ is increasingly confident in achieving sustainable inflation, supported by stronger consumption trends.
- Short-term interest rate (unanimous vote): The BoJ maintained the overnight call rate at 0.25%.
- Long-term interest rate: The central bank is set to reduce monthly purchases of Japanese government bonds (JGB) to JPY3.0t trillion in 1Q26, down from JPY6.0t. However, it remains open to increasing JGB purchases if long-term rates rise sharply.
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