The Bank of Japan held its uncollateralized overnight call rate target at around 1.25% by an 8-1 vote, following three quarter-point increases from 0.5% between December 2025 and September 2026. The central bank also unanimously decided to accelerate annual sales of exchange-traded funds (ETFs) to around JPY 860 billion from JPY 330 billion on a book-value basis, effective January 2027. It cited smooth ETF disposals since January 2026 without significant market impact and increased equity-market turnover. Dissenting board member Hajime Takata proposed a rate target of around 1.5%, arguing that underlying inflation had reached the price stability target and that policy had entered a new phase requiring faster movement towards the neutral rate to allow a flexible response. The central bank retained discretion to adjust or suspend ETF sales temporarily within the annual sales pace, depending on market conditions.
Bank of Japan Holds Policy Rate at Around 1.25%
The Bank of Japan held its uncollateralized overnight call rate target at around 1.25% by an 8-1 vote. It unanimously decided to increase annual sales of exchange-traded funds to around JPY 860 billion from JPY 330 billion on a book-value basis, effective January 2027.