AIAI briefMeeting brief2025-01-24BoJ

BOJ Raises Policy Rate to 0.5 Percent

The Bank decided, by 8 to 1, to guide the uncollateralized overnight call rate to around 0.5%, up from around 0.25%. The new target applies from 27 January. 1 2

The interest rate on the complementary deposit facility is set at 0.5%, and the basic loan rate at 0.75%. 1

Board member Nakamura dissented, saying the change should be judged at the next meeting after confirming through the Financial Statements Statistics of Corporations and other data that firms' earning power had risen. 1 2

New lending under the Funds-Supplying Operations to Support Bank Lending will end as scheduled at the end of June 2025. As a transitional measure, from July through 2025, rollovers of one-year loans are allowed up to half of the amount maturing, by unanimous decision. 1 2

The Outlook Report projects year-on-year core CPI inflation in the upper 2% range for fiscal 2024, the mid-2% range for fiscal 2025 and around 2% for fiscal 2026. 1

The Bank said that if its outlook is realized, it will continue to raise the policy rate and adjust the degree of monetary easing. 1 2

Cited releases · 3

BoJPress conferenceJan 24, 2025JA

BOJ Raises Policy Rate to 0.5 Percent

Cited releases · 3

Governor's regular press conference (January 24, 2025) AIAI translation

Outlook for Economic Activity and Prices (January 2025): The Bank's View AIAI translation

Change in the Guideline for Money Market Operations AIAI translation