The Bank of Japan left its uncollateralized overnight call rate guideline unchanged at around 1.0% at its July meeting on Friday, delivering the decision by an 8-1 vote as Policy Board member Takata Hajime dissented in favour of a 25 basis point hike to around 1.25%. Governor Ueda voted with the majority.
The decision was set out in the meeting statement published by the central bank, alongside the Bank's view in its quarterly Outlook Report. The 8-1 split continues a run of divided votes: the Board raised the rate to 1.0% by a 7-1 vote in June and held in April by a 6-3 vote.
TAKATA DISSENTS FOR HIKE
Takata proposed a rate of around 1.25%, considering that the situation had shifted to a new phase in which the Bank needs to adopt a nimble approach in response to upside risks to prices caused by demand shocks stemming from overseas developments and to changes in overseas financial conditions.
Takata also dissented at the April meeting, when he was one of three members who proposed raising the rate to around 1.0%.
UEDA WITH THE MAJORITY
Governor Ueda voted with the majority to hold at around 1.0%, alongside Deputy Governors Himino Ryozo and Uchida Shinichi and Board members Tamura Naoki, Koeda Junko, Masu Kazuyuki, Asada Toichiro and Sato Ayano.
The uncollateralized overnight call rate is the operational target through which the Bank of Japan implements monetary policy in the current framework, following the exit from the yield curve control and negative interest rate policies that defined earlier phases. At around 1.0%, the guideline sits at the highest level in more than three decades.
Alongside the statement, the Bank published The Bank's View section of its Outlook Report; the full text of the report was scheduled for 3 August, the Summary of Opinions for 10 August and the minutes of the meeting for 28 September.
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