BOJ keeps policy unchanged but pledges to continue to hike rates - UOB Group

The Bank of Japan (BOJ) returned to its very succinct policy statement at its scheduled Monetary Policy Meeting (MPM) on Thu (31 Oct) as the BOJ took a unanimous decision to keep its monetary policy guidelines for money market operations unchanged, in line with market expectations but against our projection for a 25-bps rate hike, UOB Group's economist Alvin Liew notes.

Policy unchanged but reinstated policy outlook in Outlook Report

"The Bank of Japan (BOJ) at its scheduled Monetary Policy Meeting (MPM) on 31 Oct, took a unanimous decision to keep its monetary policy guidelines for money market operations unchanged. This was in line with market expectations but against our projection for a 25-bps rate hike."

"While the BOJ did not provide any forward guidance in the latest Oct MPM statement, the pledge to continue to increase rates if the BOJ's outlook is realized reappeared in the Oct Outlook Report (The Bank's View) after being left out in the preceding Sep MPM statement."

"Still expecting one more 25 bps hike for 2024 but external developments may delay that outcome into 2025: Based on the latest Oct 2024 Outlook report and Ueda's comments during the press conference, we believe that the BOJ is not done with hikes but the timing could be influenced by external developments, especially the significant events taking place in the US in the very near future."