Key Moments
- GBP/JPY trades nearly unchanged around 210.80 following the Bank of Japan’s latest policy decision.
- The BoJ keeps its policy rate at 1.25% with an 8-1 vote, as one board member calls for a 25 bps hike to 1.50%.
- Markets turn attention to upcoming remarks from BoJ Governor Kazuo Ueda and the Bank of England’s policy meeting next week.
BoJ Holds Rates, Yen Reaction Muted
The British Pound is trading almost flat against the Japanese Yen, with GBP/JPY hovering near 210.80 after the Bank of Japan announced its latest monetary policy decision.
The BoJ decided to maintain its policy rate at 1.25%, with the decision supported by an 8-1 majority on the Policy Board. Board member Hajime Takata dissented, favoring a 25 basis point increase that would have taken the rate to 1.50%.
In its previous meeting in September, the BoJ raised policy rates by 25 basis points. This latest decision to hold follows earlier guidance from Governor Kazuo Ueda, who had cautioned in the September policy communication against moving too quickly on monetary tightening.
Market Expectations and Analyst Views on BoJ
Analysts at Brown Brothers Harriman (BBH) noted in a recent commentary that the central bank is “widely expected to keep rates on hold at 1.25% and assess September’s 25bps hike before tightening again.” They emphasized Governor Kazuo Ueda’s cautious stance, recalling that “in September, BoJ Governor Kazuo Ueda warned that rapid rate hikes could unsettle asset prices, adding that it could take some time to confirm that 2% inflation is entrenched.”
Investors are now looking ahead to Governor Ueda’s upcoming press conference for additional guidance on the policy outlook. Ahead of the announcement, Commerzbank observed that “markets currently price an around 80% probability of a rate hike in December.”
Focus Shifts to Bank of England Decision
On the United Kingdom side, attention is turning to the Bank of England, which is scheduled to deliver its monetary policy decision next week.
Strategists at Societe Generale stated that a BoE rate move is effectively “nailed on in November,” citing a “brace of upside surprises for CPI and PPI output price inflation, and firmer wage data” as the main catalysts. They cautioned that this combination will “alert the MPC to the budding risk of second round effects” and “will almost certainly trigger a hawkish response on interest rates” at the next policy meeting on November 5.
BoJ Governor Ueda: Background and Upcoming Speech
The next scheduled release of BoJ Governor Kazuo Ueda’s speech is as follows:
| Event | Details |
|---|---|
| BoJ Governor Ueda speech | Kazuo Ueda is the Governor of the Bank of Japan, he replaced Haruhiko Kuroda on April 2023. Before being appointed, Ueda was an economics professor at the University of Tokyo and held a PhD from the Massachusetts Institute of Technology. Mr. Ueda is the first academic economist to run the bank in post-war Japan, breaking with the tradition that the governor is drawn from the BoJ or finance ministry. |
| Next release | Fri Nov 06, 2026 16:00 |
| Frequency | Irregular |
| Consensus | – |
| Previous | – |
| Source | Bank of Japan |
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