Bank of Japan decides to maintain its financial policies, while Commissioner Tamura proposes a rate hike - attention is on the governor's press conference.

The Bank of Japan, at the monetary policy decision meeting on the 19th, decided by a majority to keep the policy interest rate at the current level of about 0.25%. Although Board Member Naoki Tamura proposed a rate hike to 0.5%, it was voted down. Maintaining the status quo marks the third consecutive meeting following September and October.

According to Bloomberg's economist survey conducted from the 5th to the 10th, the expected timing of additional rate hikes was 52% in January next year and 44% in December. However, following subsequent reports, it was widely believed in the market that it would be postponed this month. With consumer prices (Core CPI excluding fresh food) exceeding the 2% target, attention is focused on Governor Haruhiko Kuroda's remarks at the afternoon press conference.

The BOJ's policy is to adjust the degree of monetary easing through rate hikes if the economic and price outlook materializes. Governor Ueda is likely to reiterate his view that the economic and price developments are as expected at the press conference. The focus will be on the Governor's perception and outlook on the policy and economic trends in the U.S. with the impending wage increases next year and the inauguration of the next U.S. President Trump.

This is the first time since the July meeting when the unanimous decision was not reached to determine the additional rate hike, and opposition to the policy maintenance has been seen for the first time since the inauguration of the Ueda administration in April last year. Mr. Tamura proposed a rate hike citing the risk of inflation overshooting in line with the economic and price outlook.

Following the meeting results, the yen exchange rate in the Tokyo foreign exchange market fell to the level of 155 yen per dollar in the early half of November, the lowest since late November. It had been hovering around 154.60 yen before the meeting. In the previous day's overseas markets, following the hawkish stance of the Federal Open Market Committee (FOMC), the dollar strengthened across the board, pushing the yen down to the lower 154 yen range, the lowest since late November.

On the 18th, the FOMC cut the policy interest rate by 0.25%, but halved the expected rate cuts to two by 2025. Federal Reserve Chairman Powell noted in a press conference after the meeting that further progress in inflation would be necessary to implement additional rate cuts.

In the BOJ meeting statement, Japan's current economic situation continues to show a gradual recovery despite some signs of weakness. The outlook remains for growth to exceed the potential growth rate. The core CPI is expected to remain at a "generally consistent level" with the 2% price stability target in the latter half of the outlook period.

At this meeting, the Bank of Japan summarized and announced the results of the comprehensive review of monetary policy that has been analyzed since Governor Ueda took office in April of last year.