BOJ Deputy Governor Signals Rate Hike Pause Amid Market Volatility

Following market instability in Japan, Bank of Japan Deputy Governor Shinichi Uchida stated the bank would maintain its current interest rate policy for the time being, emphasizing the need to refrain from rate hikes during periods of market volatility. Uchida’s comments, the first from a board member since the July 31st rate increase, caused significant movement in the yen, bond futures, and stock markets. While acknowledging the volatility in Japanese markets, some economists still anticipate another interest rate hike by the year`s end, though market pricing suggests a lower probability. Uchida emphasized that, unlike in Europe and the United States, Japan`s economic context allows the bank to prioritize market stability over adhering to a strict rate hike timeline.