Bank of Japan (BoJ) Governor Kazuo Ueda is speaking at a press conference, explaining the reasons behind keeping the key interest rate once again steady at 0.5% on Thursday.
The Japanese Yen holds sizeable losses against the US Dollar, with USD/JPY gaining 0.47% on the day to trade near 153.40, at the press time.
BoJ press conference key highlights
Japan’s economy recovering moderately albeit with some weakness.
Must pay attention to trade policies’ impact on financial, FX markets, Japan’s economy and prices.
Will continue to raise policy rate if economy, prices move in line with forecast, in accordance with improvements in economy, prices.
Takata, Tamura dissented to the BoJ’s quarterly report.
Don’t think there is risk of falling behind the curve.
Have no preset ideas about timing of next rate hike.
Outlook from July largely realized in next three months’ data.
Want to take a little longer to see how the US tariff impact would affect Japanese economy.
Expect food inflation rate to moderate.
Overall consumer mindset improving, consumption solid.
One factor for consumption trend is wage hike next Shunto.
Economic Indicator
BoJ Press Conference
The Bank of Japan (BoJ) holds a press conference at the end of each one of its eight scheduled policy meetings. At the press conference the Governor of the BoJ communicates with media representatives and investors regarding monetary policy. The Governor talks about the factors that affect the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy. Hawkish comments tend to boost the Japanese Yen (JPY), while a dovish message tends to weaken it.
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Next release:
Fri Dec 19, 2025 06:30
Frequency:
Irregular
Consensus:
–
Previous:
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Source:
Bank of Japan
The section below was published on October 30 at 03:16 GMT to cover the Bank of Japan’s monetary policy announcements and the initial market reaction.
The Bank of Japan (BoJ) board members decided to keep the short-term interest rate target steady in the range of 0.4%- 0.5% following the conclusion of its two-day monetary policy review meeting on Thursday.
The decision came in line with the market expectations.
The Japanese central bank extended the pause to its tightening cycle into a sixth straight meeting, following a 25 basis points (bps) hike in January.
Summary of the BoJ policy statement
Real interest rates are at significantly low levels.
Will continue to raise policy rate if economy, prices move in line with its forecast, in accordance with improvements in economy, prices.
Important to scrutinise without any pre-set idea whether boj’s projection will be met given high uncertainty on trade policy, impact on economy.
Will conduct monetary policy as appropriate from perspective of sustainably, stably achieving 2% inflation target.
BoJ board members Takata, Tamura dissented to decision on rates.
BoJ board members Takata, Tamura proposed raising short-term interest rate target to 0.75% from 0.50%.
Proposals by Takata, Tamura turned down by majority vote.
BoJ’s Takata considered there had been a shift away from the deflationary norm and the price stability target had been more or less achieved.
BoJ’s Tamura considered with risks to prices becoming more skewed to the upside, the bank should set the policyinterest rate a little closer to the neutral rate.
BoJ’s quarterly Outlook Report
Impact of FX volatility on prices has become larger than in past as firms have become more active in raising prices, wages.
Underlying consumer inflation likely to stagnate on slowing growth, but increase gradually thereafter.
Underlying consumer inflation likely to be at level generally consistent with 2% target in second half of projection period from fiscal 2025 through 2027.
Risks to economic outlook skewed to downside.
Risks to inflation outlook roughly balanced.
Uncertainty surrounding trade policy, impact on overseas economic, price developments remains high.
Must be vigilant to impact of trade policy uncertainty on markets, Japan’s economic, price developments.
Japan’s economy recovering moderately, although some weaknesses are seen.
Board’s Real GDP Fiscal 2025 median forecast at +0.7% Vs +0.6% in July.
Board’s Real GDP Fiscal 2026 median forecast at +0.7% Vs +0.7% in July.
Board’s Real GDP Fiscal 2027 median forecast at +1.0% Vs 1.0% in July.
Board’s Core CPI Fiscal 2025 median forecast at +2.7% Vs +2.7% in July
Board’s Core CPI Fiscal 2026 median forecast at +1.8% Vs +1.8% in July.
Board’s Core CPI Fiscal 2027 median forecast at +2.0% Vs +2.0% in July.
BoJ’s Report on Risks
Still high uncertainties over the outlook for the global economy.
Moves to reflect price rises in wages could also weaken.
There is a possibility that both wages and prices will deviate upward from the baseline scenario.
There is a risk of future developments in foreign exchange rates and import prices, including international commodity prices.
There are still high uncertainties over the outlook for the global economy.
With regard to the US economy, there are high uncertainties regarding the channels and timing through which downward effects due to tariffs will materialize.
Regarding the Chinese economy, there remain high uncertainties surrounding the future pace of growth.
Attention needs to be paid to the possibility that developments such as recent moves toward fiscal expansion, particularly in the US, Europe, could push up the global economy.
Trade policies announced so far could trigger change in the trend of globalization.
Market reaction to the BoJ policy announcements
USD/JPY rebounds sharply to challenge 153.00 once again before retracing slightly to 152.80 where it now wavers. The pair is up 0.11% on the day, as of writing.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.08% | -0.03% | 0.12% | -0.02% | -0.19% | -0.17% | -0.04% | |
| EUR | 0.08% | 0.04% | 0.21% | 0.06% | -0.11% | -0.09% | 0.04% | |
| GBP | 0.03% | -0.04% | 0.16% | 0.02% | -0.15% | -0.14% | -0.00% | |
| JPY | -0.12% | -0.21% | -0.16% | -0.16% | -0.30% | -0.31% | -0.19% | |
| CAD | 0.02% | -0.06% | -0.02% | 0.16% | -0.15% | -0.14% | -0.02% | |
| AUD | 0.19% | 0.11% | 0.15% | 0.30% | 0.15% | 0.01% | 0.15% | |
| NZD | 0.17% | 0.09% | 0.14% | 0.31% | 0.14% | -0.01% | 0.15% | |
| CHF | 0.04% | -0.04% | 0.00% | 0.19% | 0.02% | -0.15% | -0.15% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
This section below was published on October 29 at 23:00 GMT as a preview of the Bank of Japan Interest Rate Decision.
- The Bank of Japan is widely expected to keep interest rates unchanged at 0.5% for the sixth consecutive time on Thursday.
- The central bank is likely to wait for the Takaichi cabinet’s first moves to resume its monetary tightening cycle.
- A dovish hold on Thursday, with no signs of an upcoming rate hike, might send the Yen tumbling.
The Bank of Japan (BoJ) meets on Thursday and is expected to keep its benchmark interest rate unchanged at 0.5%, awaiting the first moves of Prime Minister Sanae Takaichi’s new cabinet.
Market hopes that the BoJ will continue normalising its monetary policy remain intact, and some central bank policymakers have confirmed that theory. Expectations of an interest rate hike in October, nevertheless, have receded, following the election of the fiscal dove Takaichi as Japan’s Prime Minister in mid-October.
In this context, investors will keep their focus on the vote split, expecting to see some dissenting voices, and on the tone of BoJ Governor Kazuo Ueda’s press conference, seeking validation of a rate hike in December or, at the latest, in January.
What to expect from the BoJ interest rate decision?
As it stands, the BoJ is expected to maintain its monetary policy unchanged for the sixth consecutive meeting in October and reiterate its commitment to gradual monetary tightening.
A recent Reuters poll showed that 60% of analysts expect the Bank of Japan to raise its benchmark interest rate to 0.75% from the current 0.5% before the year-end. Data from the overnight swaps market, however, revealed that the chances of an October hike have dropped to about 24%, from 68% last month.
The new Prime Minister Takaichi, an assistant of former Prime Minister Shinzo Abe, has defended a looser fiscal policy and pledged to reassert the government’s authority over the Bank of Japan and its monetary policy. This has raised concerns about the central bank’s independence, dampening market expectations of immediate rate hikes.
With this in mind, the stubbornly strong inflation is likely to pose a serious challenge to Takaichi’s aim of an expansive monetary policy. Data released last week revealed that the National Consumer Price Index (CPI) accelerated to 2.9% in September, from the previous 2.7%, remaining above the central bank’s target for price stability.
Beyond that, service-sector inflation has picked up for the second consecutive time in September, endorsing the BoJ’s view that rising labour costs will keep price pressures sustainably above the central bank’s 2.0% target in the coming months.
Against this background, some BoJ policymakers have called for immediate rate hikes. Board Member Hajime Takata said last week that now is the appropriate time to raise interest rates, noting that inflation has remained above the bank’s target for three and a half years already, and the economic risks stemming from US tariffs have eased. BoJ Governor Ueda, however, has been showing a more cautious view.
How could the Bank of Japan’s monetary policy decision affect USD/JPY?
In this context, investors have already assumed a delay of the next rate hike, but they are likely to look for confirmation that the plan to keep normalising the monetary policy remains in play. A dovish hold, with no mention of upcoming rate hikes, might disappoint markets and send the Japanese Yen (JPY) on a tailspin.
The Yen lost more than 2% against the US Dollar (USD) in the week after Takaichi secured support to form a cabinet in mid-October. This week, USD/JPY has whipsawed, pulling back following the agreement between the US and Japan, and higher hopes of a China-US trade deal, to bounce up again following Chairman Jerome Powell’s hawkish comments after the Fed’s monetary policy decision on Wednesday.
USD/JPY 4-Hour Chart
From a technical perspective, Guillermo Alcalá, FX analyst at FXStreet sees the USD/JPY pair looking for direction with key resistance below the 153.20 area: “The risk is on a too dovish BoJ statement, which might disappoint investors and send the pair back beyond the eight-month highs, at the 153.25 area, aiming for mid-February highs, at 154.80.”
“On the other hand, clear signals hinting at a rate cut in December or a high number of dissenters would give fresh hopes for Yen bulls to retest the October 21 and 22 lows, at the 151.50 area,” says Alcala.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.