The Bank of Japan's decision unexpectedly saw two votes to raise interest rates

On September 19, the Bank of Japan left the base rate unchanged at about 0.5% for the fifth consecutive meeting after a two-day policy meeting that ended on Friday, after raising interest rates to current levels in January as part of an effort to return to normal monetary policy after a decade of unconventional easing. The announcement of the Bank of Japan's decision was significantly delayed than usual due to internal voting differences. The Bank of Japan voted 7-2 to keep interest rates unchanged, and deliberators Takada and Naoki Tamura disagreed with the decision. Both believe that the rate hike should be raised by 25 basis points to 0.75%, because the central bank should move the policy rate slightly closer to the neutral rate as the risk of price increases is more skewed to the upside. At the same time, the Bank of Japan also announced the start of the sale of its holdings of ETFs and REITs assets. Stimulated by this hawkish surprise, the yen strengthened by more than 50 points in the short term, Japanese stocks fell back, and Japanese 10-year government bonds continued to decline, and yields rose.