Bank of Japan Holds at 0.75% as Yen Eyes the Policy Path

The Bank of Japan kept its uncollateralised overnight call rate at around 0.75%, holding policy steady as it continues to balance domestic inflation against external risks. The decision at the April 28 meeting came by a 6-3 majority vote — a wider split than earlier in the year and a signal that the internal debate is intensifying.

Steady, but not settled

The 0.75% rate has been maintained throughout 2026, with the board holding in January and March before April's split decision. While the headline outcome was no change, the growing dissent hints at a board that is gradually preparing the ground for its next move.

The yen's swing factor

For the yen, the dominant driver remains the rate differential with the United States. With the Fed holding policy restrictive and the 10-year Treasury yield near 4.48%, the gap continues to weigh on the currency. USD/JPY therefore reacts sharply to any shift in expectations on either side of the spread.

Traders should watch BOJ communication closely. Any hint of a hawkish tilt could trigger an outsized yen rally given stretched positioning, while continued patience leaves the carry dynamic — and the rate spread — firmly in control.