BOJ waits as LDP candidates navigate competing pressures

key takeaways

• The Bank of Japan (BOJ) held interest rates steady again on 19 September, fueling speculation about its October meeting.
• The timing of that meeting – weeks after a new government takes office – raises questions about whether domestic politics will lead the bank to continue holding.
• The impact of domestic politics on the BOJ’s decision-making can be overstated, particularly compared to overseas political risks, but to the extent that the BOJ is watching the direction of fiscal policy, the LDP’s candidates are sending muddled signals.