The Bank of Japan kept its policy rate steady at 1%, with an 8-1 vote, as board member Hajime Takata proposed a hike to 1.25%. The central bank warned that underlying inflation could exceed its 2% target, noting that core inflation has been held below this level by government subsidies for energy and school fees. The yen weakened to around 163 per dollar before recovering to 157.96, with Tokyo intervening in currency markets. The 10-year government bond yield remains at about 2.8%, and market participants are closely watching Governor Kazuo Ueda’s statements for signs of accelerated monetary tightening.
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