You can feel it, that quiet confidence coming out of Tokyo again.
While most traders are still glued to U.S. inflation chatter and Fed cuts, the Bank of Japan just reminded the world they’re still in the game.
On Friday, Deputy Governor Shinichi Uchida told a room full of Japanese credit unions that if growth and prices move as expected, the BOJ will keep raising rates.
Here's what you need to know:
1. A Slow But Intentional Shift
BoJ Could Hike on October 30
BoJ board member Naoki Tamura gave a speech in Okinawa on October 16, and the message was clear: Japan’s ultra-easy money era is finally ending.
He said the economy’s holding up — companies are investing, wages are rising, and inflation has been
— #Blue Horseshoe (#@BlueHorse88)
11:30 PM • Oct 16, 2025
The BOJ’s tone has come a long way from “infinite easing” days.
They already ended their decade-long stimulus and nudged rates to 0.5% back in January.
Since then, inflation’s held above 2% for three straight years, something Japan hasn’t seen in decades.
But Uchida was careful. He knows the country’s inflation story is fragile. Prices are rising, sure but mostly because of import costs and tariffs, not booming wages. And that’s why Tokyo’s walking a fine line: push too hard, and they risk choking growth; move too slow, and the yen keeps bleeding.
He summed it up perfectly: “We’ll judge without preconception.”
In trader terms? They’ll keep hiking if the data lets them but they’re not forcing it.
2. Politics, Patience, and Price Action
The BOJ’s balancing act just got trickier after Sanae Takaichi’s victory in the LDP leadership race, a fiscal dove who prefers to keep things steady.
That political win cooled expectations for an October hike, but the market still sees 0.75% by January as fair game.
And that’s why USD/JPY keeps dancing near its highs.
Every BOJ comment gets priced in, faded, and repriced again. It’s the same rhythm every yen trader knows a slow drumbeat that always ends in volatility.
My Takeaway
Japan’s not the wild card anymore it’s the slow mover that can catch traders sleeping.
While everyone’s staring at Powell and Trump, Tokyo’s quietly building momentum.
If the BOJ follows through with another hike, that comfy yen short trade could flip fast.
And if you’re holding USD/JPY long thinking “Japan never hikes”?
Well, this might be our early warning.