VIEW Investors react to BOJ decision to keep rates steady
As widely expected, the central bank maintained short-term interest rates at 0.5% by a unanimous vote at the two-day policy meeting that ended on Thursday.
In a quarterly outlook report, the board revised up its core consumer inflation forecast for the current fiscal year to 2.7% from 2.2% projected three months ago.
TOHRU SASAKI, CHIEF STRATEGIST AT FUKUOKA FINANCIAL GROUP, TOKYO:
"The revise up of the CPI forecast to 2026 is still moderate. So they are still cautious about the risks over the inflation outlook, but other than that, it's not such an eye-catching result.
"If we think about the level of the inflation rate, the BOJ can be hawkish. The BOJ can hike interest rates anytime soon.
"But still the BOJ continues to be cautious on global risks, especially the tariff policy from the United States. And actually, between Japan and the U.S., their understanding of the tariff agreement is totally different. So there's still uncertainty over the trade talks between Japan and the U.S."
CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE:
"The upward revision of the core inflation forecast keeps policy normalisation hopes alive. Governor Ueda's presser will be closely scrutinised for any hint on the timing of the next rate hike."
MASATO KOIKE, SENIOR ECONOMIST, SOMPO INSTITUTE PLUS, TOKYO:
"I have consistently maintained that 0.5 is the BOJ's terminal rate since April 2, but following the agreement on tariff negotiations, I believe the possibility of a rate hike this year has increased."
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