BOJ Holds Rate at 0.5%, Upgrades Inflation Forecast

The Bank of Japan kept its short-term policy rate at 0.5% at the end of its Oct. 30 two-day meeting, extending its pause in tightening as widely expected. Two board members, Naoki Tamura and Hajime Takata, dissented and called for an immediate rise to 0.75%, underscoring a growing split within the bank. The BoJ slightly upgraded both its growth and inflation forecasts, saying underlying inflation is likely to reach about 2% in the latter half of its projection period, and reiterated a conditional pledge to raise borrowing costs gradually if projections materialize. Policymakers warned of downside risks, notably uncertainty from U.S. tariff measures and slower U.S. growth, and noted domestic political developments after Prime Minister Sanae Takaichi took office. Markets largely expected the hold; investors pressed for guidance at Governor Kazuo Ueda’s post-meeting briefing, and the yen weakened on the decision.