08:03 AM EDT, 07/31/2024 (MT Newswires) -- At Wednesday's meeting, the Bank of Japan (BoJ) announced it was raising its policy rate to 0.25%, noted Societe Generale.

During the press conference, with regard to another rate hike this year, Governor Kazuo Ueda said, "If the data shows conditions are on track, and if such data accumulates, we would of course take the next step (this year). In the long term, gradually adjusting historically very low interest rates could be beneficial, as it reduces the future risk of sudden adjustments and potential economic instability."

On the other hand, the BoJ also decided on a plan to reduce the amount of its monthly outright purchases of Japanese government bonds (JGB) to bring them to about three trillion yen in Q1 2026. The amount is to be cut by about 400 billion yen each quarter, with reductions of 5.3 trillion yen in August and September and 4.9 trillion yen in Q4 2024.

SocGen had previously thought that the policy rate would be capped at 0.25% this year. However, taking into account Governor Ueda's comments Wednesday, the bank has changed its BoJ call to another rate hike in December.