Bank of Japan Holds 1.25% Policy Rate, Defeating One Member’s Call for a 1.5% Hike

On October 30, the Bank of Japan (BOJ) voted 8‑1 to keep its policy rate at 1.25%. Board member Hajime Takata dissented, arguing that underlying inflation has reached the 2% target and that rates should move faster toward neutrality. The BOJ’s outlook now sees core inflation broadly in line with its target, raising its 2027 core inflation forecast to 2.6% from 2.4% and noting upside risks. The board also approved doubling the pace of ETF sales from January 2027. Meanwhile, the Fed and the Bank of Canada both held rates, with the BoC raising its policy rate to 2.5% for the first time since July 2023. Markets now anticipate a potential rate hike in December, with the BOJ’s decision setting the stage for that meeting.