Well, they did it: The Bank of Japan hiked rates for the second time in four months.

Although speculation was running high ahead of Wednesday’s policy meeting, fewer than one in three economists actually believed the BoJ would pull the trigger again this soon after March’s historic move.

The July decision was seen as make or break for the overcooked yen, which recently surged 6% in a matter of weeks, a monumental rally that triggered an across-the-board global carry unwind.

“Moves to raise wages have been spreading,” the BoJ said Wednesday. “Upside risks to prices require attention.” That’s something you probably thought you’d never hear. And yet there it is. Japanese policymakers are eying upside risks to inflation.

In the new outlook, the bank said underlying price growth “is expected to increase gradually [as] the output gap improve[s] and medium- to long-term inflation expectations rise.” There’s a “virtuous cycle between wages and prices” and it’s expected to continue and “intensify.”

As a quick reminder, Japan’s key inflation gauge — CPI ex-fresh food — spent a 27th month at or above the bank’s 2% target in June, according to the most recent update.

The short-term rate in Japan will now be “around” 0.25% (up from 0-0.1%). The vote split was 7-2.

In addition to the rate hike, the BoJ unveiled a plan to trim bond-buying. JGB purchases will be cut in a “predictable manner,” the BoJ said, adding that it’ll retain “enough flexibility” to keep the JGB market stable. By Q1 2026, the monthly pace of bond-buying will be around 2.9 trillion yen, down from 5.7 trillion yen currently. That was roughly consistent with market expectations. The slide deck suggested the bank’s mountainous pile of JGBs will shrink by up to 8% going forward.

The bank made it clear that any sort of disorderly bond selloff will be dealt with expeditiously. “In the case of a rapid rise in long-term interest rates,” the BoJ will be “nimble,” upping the amount of JGB purchases and conducting fixed-rate operations “regardless of the monthly schedule.” In other words: Don’t get any ideas.

The forward guidance was hawkish. Assuming the growth and inflation outlook as expounded in the new projections is realized, the BoJ said it’ll “continue to raise the policy rate and adjust the degree of monetary accommodation.”

Of course, policy’s nowhere near restrictive, something the BoJ was keen to emphasize. “Real interest rates are expected to remain significantly negative,” the bank said. “Accommodative financial conditions will continue to firmly support economic activity.”

This was so exciting, apparently, that the BoJ’s website couldn’t handle the traffic. It worked ok for me, but according to Bloomberg, the site was “difficult to access” in and around the decision, when the bank was “overwhelmed by people seeking information.”