Bank of Japan Holds Rates in 8-1 Vote as Yen Gains 0.4%

The Bank of Japan held its policy rate unchanged in an 8-1 vote, while the yen rose 0.4% to 157.12 per dollar as the central bank said underlying inflation had reached its 2% target.

It was the first time the BOJ’s statement described underlying inflation as having reached that level. The decision matched expectations among 53 economists surveyed, leaving the policy rate unchanged despite the inflation assessment.

The BOJ also plans to increase annual sales of exchange-traded funds (ETFs) to about 860 billion yen from roughly 330 billion yen starting in January. The bank built up ETF holdings while supporting asset prices during its fight against deflation. The higher sales pace marks another step in its move away from that support.

The yen’s advance came as global technology shares weakened and oil prices rose, prompting a shift toward assets seen as havens. Currency and bond markets reflected a hawkish tightening signal, while the overall market response remained steady.

Markets are watching for further policy guidance from BOJ Gov. Kazuo Ueda at the post-meeting news conference.