How to read this BOJ rate screen
Interpreting the table and chart
Table rows correspond to Bank of Japan (BOJ) Monetary Policy Meeting dates scheduled over the next year or so.
- Implied post-meeting rate is the market-implied level of the overnight rate after each meeting. On this page, that’s intended to be consistent with the BOJ’s Target O/N Call Rate operating framework, using the overnight benchmark (TONAR) as the underlying reference.
- Probability of hike/cut is an approximate probability of a discrete policy move at that meeting. The page converts market pricing into a simplified “move” probability using the selected step size (default 25bps, adjustable via the drop-down).
- # of hikes/cuts shows the cumulative number of hikes/cuts priced between now and each meeting (also dependent on the step size selected).
- Δ vs current (bps) shows the cumulative change priced between now and each meeting in basis points (25bps = 0.25%).
The chart plots the implied post-meeting rate across all upcoming meetings. An upward-sloping line indicates markets are pricing tighter BOJ policy settings over time; a flat line suggests an extended pause; a downward-sloping line indicates expected easing. Use the screen to see what is currently priced in and to compare today’s expectations with those from previous weeks or months.
What this page measures
The data on this page expectations inferred from market pricing, not a forecast. When the site refers to “probabilities,” it is describing odds implied by tradable instruments that implicitly reference future overnight-rate / policy-rate settings. This is a snapshot of consensus pricing that can be wrong and will move as new information arrives.
The page focuses on scheduled BOJ meetings. In exceptional circumstances, policy changes can occur outside regular meetings. Market pricing may also shift on changes to BOJ communication, operational guidance, or broader financial conditions even if the headline policy setting is unchanged.
TONAR vs the BOJ policy target
TONAR (Tokyo Overnight Average Rate) is a published overnight unsecured benchmark rate. The BOJ’s policy implementation aims to guide overnight money-market conditions, so TONAR is often used as a clean market reference for “where overnight funding is trading.” This page displays both the BOJ target concept (Target O/N Call Rate) and the most recent observed TONAR as context.
What “probabilities” mean (and what they don’t)
The probabilities on this site are market-implied. They describe what is priced, not what will happen. Markets can overreact, underreact, or price scenarios that never occur. The goal is to translate market pricing into a clean, intuitive summary of expectations using a consistent step size.
Step size matters because markets may be pricing smaller adjustments, larger moves, or a mix of outcomes across meetings. The probability fields are therefore best read as approximations that help summarize pricing, rather than precise forecasts.
Methodology summary
At a high level, the site uses interest-rate market instruments linked to Japan’s overnight index (TONAR) to infer an expected policy/overnight-rate path meeting-by-meeting. Those implied levels are translated into an implied post-meeting path and a cumulative change versus current, along with approximate probabilities of discrete moves based on the selected step size.
Data is updated multiple times daily but is not “live”. If the most recent fetch is temporarily unavailable, the page may display the most recent cached values.
How to use this in practice
This tool is useful for quickly answering: “What is the market pricing for the BOJ over the next several meetings?” Typical uses include tracking how BOJ expectations respond to inflation/wage data, BOJ communication, and global rates moves; comparing today’s pricing to prior snapshots; and forming simple scenarios for how Japanese rates expectations may affect JGBs, FX (JPY crosses), and global risk assets.
About the Bank of Japan
The Bank of Japan is Japan’s central bank. Its purpose and framework are set in the Bank of Japan Act, and its monetary policy is decided by the Policy Board. The BOJ influences short-term money-market rates through market operations and its policy tools, with the overnight rate serving as a key anchor for yen funding conditions.
Policy decisions are typically made at scheduled Monetary Policy Meetings (commonly eight per year, though schedules can vary). At each decision point the BOJ may leave its policy setting unchanged (“hold”), raise it (“hike”), or lower it (“cut”).
A note on interpretation
Because Japan’s rate levels have often been low relative to other major economies, small changes can be meaningful. Also, market pricing may incorporate expectations about the timing of moves, operational details, and “path” uncertainty. Treat the outputs as a concise summary of pricing, not a definitive prediction of the next BOJ decision.
