The Bank of Japan unanimously decided to keep its policy rate unchanged at 0.25%. Amid growing confidence in achieving its sustainable inflation target, the BoJ will closely watch the impact of FX movements on inflation. The timing of the next hike remains uncertain, but we see a chance of a hike in December.

The Bank of Japan kept interest rates steady today and revised up its assessment on consumption, signalling its confidence a solid economic recovery would allow the central bank to raise interest rates again in coming months.

The decision came as the central bank seeks to wean its economy off the long-held ultra-easy monetary policy and curb the yen's slide against the U.S. dollar.