The Bank of Japan (BoJ) has maintained its interest rate at 0.25% for the third consecutive meeting, signaling caution amidst global monetary policy shifts. While the Federal Reserve cut rates by 25 basis points, the BoJ's decision was not unanimous, with one board member advocating for an increase to 0.5%. Naoki Tamura, formerly of Sumitomo Mitsui Financial Group, highlighted upward inflation risks as his rationale.

Insiders suggest that BoJ officials are confident that Japan's economy is on track for stable inflation supported by wage growth. However, they remain watchful of domestic and international political developments, including the economic policies of President-elect Donald Trump and tax reform discussions in Japan. Recent positive economic indicators support the argument for a tighter monetary policy.

Marcel Thieliant of Capital Economics noted, "Consumer prices have regained momentum in recent months. With inflation in services broadening, the BoJ should trust that price pressures are domestic rather than imported."