The Bank of Japan left its benchmark interest rate unchanged at 0.75%, matching market expectations and the previous reading, but its guidance reinforced expectations for further tightening. Three policymakers dissented in favor of a rate increase, and Kazuo Ueda said hikes may become necessary if a current supply shock leads to broad-based inflation or second-round effects. The bank also said exchange-rate moves are increasingly likely to affect prices and underlying inflation expectations, suggesting foreign-exchange-driven inflation pressures may carry greater weight in future decisions. Strategist Naomi Muguruma said this points to a shift in the Bank of Japan’s policy reaction function. The decision matters for the yen, bond yields, liquidity, risk appetite, and broader market sentiment, including digital assets.