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 overnight call rate 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
What's the probability of a BOJ rate hike at the next meeting?
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.
Meeting liveness gauge
In rates-market shorthand, a meeting is "live" when a policy move there is a realistic possibility, even if it isn't the most likely outcome. The liveness gauge applies this to the next scheduled meeting: it reads LIVE once the probability of a hike or cut (at your selected step size) reaches 25%, and DEAD below that.
There's no official threshold for "live." We use 25%, a one-in-four chance (6.25bps priced at the default 25bps step), because that is where a move stops being a long shot: by 25%, widely used probability-language scales, such as the IPCC's and those used by US and UK intelligence analysts, no longer describe an outcome as "very" or "highly" unlikely. It is still a judgment call, which is why the exact probability is always shown in the gauge's tooltip and elsewhere.
STRENGTH uses an asymmetric scale to show how firmly the meeting sits on its side of that line: STRONG under 10%, MODERATE 10–20% and WEAK 20–25% on the dead side; WEAK 25–40%, MODERATE 40–70% and STRONG 70% and above on the live side. The tooltip's Conviction score is a separate, outcome-neutral measure (the same one used on the comparison page): it is lowest at a 50/50 split and highest when pricing is near 0% or 100%.
Like every probability on this site, the gauge reflects market pricing, not a forecast. See the methodology page for the full method, the reasoning behind each cutoff, and its limitations.
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 3x per day. If the most recent fetch is temporarily unavailable, the page may display the most recent cached values.
Note: These probabilities are derived from OIS (overnight index swap) markets, not TONA futures contracts. These instruments are closely related and often move together, but this site's calculations are OIS-based throughout.
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, set out in the Bank of Japan Act, is to achieve price stability, thereby contributing to the sound development of the national economy. Since a joint statement with the government in January 2013, this has taken the form of a 2% price stability target, measured by the year-on-year change in the consumer price index. The Bank's key policy tool is a target for the uncollateralized overnight call rate, supported by outright purchases of Japanese government bonds and other asset operations.
The uncollateralized overnight call rate is the rate at which Japanese financial institutions lend uncollateralized yen funds to one another overnight, and the Policy Board sets its target through a guideline for money market operations at each Monetary Policy Meeting. This target is implemented primarily through the Complementary Deposit Facility, under which the Bank pays interest on financial institutions' excess reserves at a rate set equal to the target itself, anchoring the floor. As a ceiling, the Complementary Lending Facility offers overnight loans to financial institutions at the Basic Loan Rate, currently set 25 basis points above the target. Together, these tools keep the actual traded overnight rate —tracked by the TONAR (Tokyo Overnight Average Rate) benchmark— close to the Bank's target.
Monetary policy decisions are made by the nine-member Policy Board — the Governor, two Deputy Governors, and six other members — each appointed by the Cabinet, subject to the consent of both houses of the Diet, for five-year terms. Unlike some central banks, the Board decides by majority vote rather than consensus, and individual dissents are published. The Board holds Monetary Policy Meetings eight times a year, each running over two days, with the decision announced on the second day; unlike most G7 central banks, the BOJ does not commit to a fixed release time, which can make announcement days especially volatile. At each meeting the Board 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.
