Back to today’s briefing

Story perspectives

Bank of Japan Holds Rates; December Hike Odds Rise

10/31/2025

36 9 Full Breakdown

Summary

Story summary

The Bank of Japan (BoJ) kept its benchmark rate at 0.50% at its latest meeting, with a 7-2 vote and two dissenters seeking 0.75%.
Governor Kazuo Ueda cited the need for more wage data and external risks, including U.S. tariffs, and remained cautious.
Markets now assign a 50% chance of a December rate hike.
The yen weakened after the announcement amid concerns about gradual normalization under Prime Minister Sanae Takaichi.

History

Historical Context

Japan's economic stagnation, known as the Lost Decades, began after the asset price bubble burst in 1990, leading to a GDP growth rate of just 1.14% annually from 1991 to 2003. In 2001, the Bank of Japan adopted a zero interest rate policy to combat persistent deflation. Today, the ongoing 0.50% rate reflects caution amid external pressures and domestic wage concerns.

1 of 2

Story summary

The Bank of Japan (BoJ) kept its benchmark rate at 0.50% at its latest meeting, with a 7-2 vote and two dissenters seeking 0.75%.
Governor Kazuo Ueda cited the need for more wage data and external risks, including U.S. tariffs, and remained cautious.
Markets now assign a 50% chance of a December rate hike.
The yen weakened after the announcement amid concerns about gradual normalization under Prime Minister Sanae Takaichi.

1 / 2