The Bank of Japan has once again shown a cautious attitude towards further rate hikes at its recent monetary policy meeting.

On Monday, the minutes of the October meeting (before the US election) released by the Bank of Japan showed that BOJ policymakers have not yet reached a consensus on whether to raise rates in December. Some policymakers warned that there might be market volatility again after the US election and emphasized the need to closely monitor market dynamics, especially the fluctuations in the yen exchange rates.

Aftermath of the US election still present, instability in Japanese politics affecting prospects for rate hikes.

At the meeting on October 30-31, the Bank of Japan kept its benchmark interest rate unchanged at 0.25% and stated that the risks to the US economy have somewhat diminished, with conditions for another rate hike starting to take shape.

On November 5th, Trump was elected President of the United States, leading to a rise in global stock markets and a stronger US dollar. However, analysts warned that if Trump insists on raising tariffs, the market could become volatile again. One of the committee members in the meeting minutes also stated that while the risk of a hard landing for the US economy has decreased, it is 'too early to conclude that the market will return to calm' and another member expressed that the central bank must 'take time and act cautiously' when raising rates.

Analysts believe that a further rate hike by the Bank of Japan may trigger market volatility and disrupt the long-term path of the bank's monetary policy normalization. Some economists pointed out that the rate hike by the Bank of Japan in July was one of the factors that triggered the global market plunge in early August.

Additionally, the instability in Japanese politics is also a key factor affecting the Bank of Japan's rate hike path. Last month, Prime Minister Fumio Kishida faced his ruling party's worst election results since 2009. A key opposition leader stated that the Bank of Japan should not raise rates before March.

According to a survey released by Reuters, the majority of economists expect the Bank of Japan to not raise interest rates again this year.

Raising interest rates in December is not "completely impossible", as the weakening yen intensifies inflationary pressures.

However, raising interest rates is not "completely impossible" either. Some committee members believe it is necessary to clearly convey the determination of the Bank of Japan to continue raising interest rates if the economy and price levels meet expectations. One member stated, "The Bank of Japan should consider further rate hikes after assessing the development of the U.S. economy", and added that the Japanese economy no longer requires extensive monetary policy support.

At the same time, Bank of Japan Governor Kaho Ueda has not ruled out the possibility of raising interest rates next month. He has stated, "The weakening yen leading to increased inflation risks was one of the key factors in the Bank of Japan's decision to raise rates in July."

"The weakening yen leading to increased inflation risks was one of the key factors in the Bank of Japan's decision to raise rates in July."

Currently, the weakening yen has become a headache for Japanese policymakers as they worry that rising costs of imported fuel and raw materials will impact consumer spending. Many observers believe that the fate of the yen will be a catalyst for the next rate hike.

Over the past month, the yen has weakened against the dollar, potentially further intensifying inflation pressures in Japan. Due to investors' cautious attitude towards the risk of Japanese authorities intervening to purchase yen, the USD/JPY exchange rate is at 153.49, lower than last week's peak of 154.70.