Sources: BOJ Leaning Against Consecutive Rate Hike in October, Earliest Action in December
nashnova research
The Bank of Japan is leaning toward holding its 1.25% rate steady on October 30, with December the earliest window for the next move — back-to-back hikes have not happened at the BOJ since before 1980, and that pattern itself is the signal.
Why stand pat in October?
Sources say officials see no sign that upside inflation risks are accelerating sharply enough to justify consecutive hikes.
The BOJ will keep assessing economic data to judge whether December conditions warrant a move.
This means → October's meeting is not a decision point — it is a data-collection checkpoint. The real window is December.
How is the market pricing this?
The overnight index swap market — a derivative reflecting short-term rate expectations — prices an October hike at roughly 10%.
Yet the probability of a hike by December has climbed to 88%, well above the roughly one-third of surveyed economists who picked December.
In plain terms = the market is more aggressive than economists — swaps nearly lock in a December move, while over half of economists expect the BOJ to wait until January.
Why are back-to-back hikes so rare?
Last month the BOJ raised its benchmark rate to 1.25%, a 31-year high and the second hike in three months — the fastest pace since 1990.
Yet the BOJ has not hiked in two consecutive months since before 1980.
This reflects a deep institutional preference: observe how each hike transmits through the economy before deciding the next step. In plain terms = the BOJ's institutional DNA does not support rapid-fire moves.
Inflation hit 2% — why isn't the job done?
Governor Kazuo Ueda told parliament that stabilising the inflation trend near 2% is critical.
Sources say core inflation can now be assessed as sitting around 2% — the first time since the target was set in 2013, over a decade ago.
This means → "touching" 2% and "staying at" 2% are different goals. The BOJ is not ready to declare victory just because the number has been reached once.
What does the weaker yen tell us?
The yen traded at roughly 158.05 per dollar on Tuesday, weaker than the ≈155.87 level before the September 18 hike.
This reflects limited market conviction that another hike is imminent — the BOJ raised rates, yet the yen weakened further.
Whether the December meeting delivers a hike will be the key test of the BOJ's policy trajectory.
市场有风险，内容仅供研究参考，不构成投资建议。