Bank of Japan raised policy rates by 25bp; vote 7-2 with two dissenters. BOJ
said it will continue to raise rates as warranted by economic, price and
financial conditions, with no preset timing or pace. Officials will monitor
Middle East tensions, AI-driven demand and exchange-rate moves for their effects
on growth and inflation. Outlook: economy seen as in a moderate recovery but not
decisively strong. Inflation: expectations have edged up; wholesale inflation
remains elevated from oil, FX and AI demand, raising the risk that underlying
inflation could exceed the 2% target. Press briefing reiterated readiness to
tighten further and that no specific measures or timetable are ruled out;
committee differences are normal and current divergence of views is not a
problem.
