刚刚宣布：不加息！

Core Viewpoint - The Bank of Japan (BOJ) has decided to maintain its benchmark interest rate at 0.5%, marking the sixth consecutive time it has held rates steady, aligning with market expectations [1][6]. Economic Outlook - The BOJ's policy committee voted 7 to 2 in favor of the decision, with two members advocating for a rate increase to 0.75% due to rising inflation risks [6]. - The BOJ has indicated that the risks to Japan's economic outlook are skewed to the downside, while inflation risks are roughly balanced. There remains significant uncertainty regarding trade policies and their impact on the economy and price trends [6]. - Japan's economy is experiencing a mild recovery, but there are signs of weakness, with potential consumer inflation expected to stagnate before gradually rising [6]. GDP and CPI Projections - The BOJ has revised its GDP growth forecasts for 2025 to 0.7% (up from 0.6%), with similar projections for 2026 and 2027 remaining unchanged at 0.7% and 1% respectively [7]. - CPI growth expectations for 2025 and 2026 are set at 2.8% and 2.0%, respectively, with 2027 also projected at 2.0% [7]. Currency and Market Reactions - Following the announcement, the USD/JPY exchange rate saw a significant increase, reversing previous declines [11]. - The current exchange rate dynamics suggest that the yen may continue to weaken against the dollar, with analysts predicting that the next rate hike from the BOJ could occur in December or early next year [16]. Inflation and Policy Implications - Japan's core CPI for September was reported at 2.9%, exceeding the BOJ's target of 2%, indicating persistent inflationary pressures [14]. - The recent comments from U.S. Treasury Secretary suggest that Japan's government is willing to allow the BOJ some policy space, which may support expectations for tightening monetary policy [14]. Political Context - The new Japanese Prime Minister, who advocates for expansionary fiscal and loose monetary policies, may influence the BOJ's decisions, although the BOJ is expected to maintain its independence [15]. - Analysts believe that the U.S. may pursue a weak dollar policy to boost exports, potentially pressuring Japan to allow the yen to appreciate against the dollar [14].