The Bank of Japan (BOJ) surprised the markets with a 15-bps rate hike to 0.25, UOB Group senior economist Alvin Liew notes.

BOJ to keep its policy unchanged in September

“The Bank of Japan (BOJ) at its scheduled Monetary Policy Meeting (MPM) on Wed (31 Jul), surprised the markets with a 15-bps rate hike to 0.25% while the details announced for the reduction of the monthly purchases of Japanese Government Bonds (JGB) was in line with market expectations.”

“The MPM statement also included policy forward guidance, which stated “if the outlook for economic activity and prices presented in the July Outlook Report will be realized, the Bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation.”