Japan Holds Policy Interest Rate Steady

The Bank of Japan kept its policy interest rate unchanged at 0.50 percent, in line with market expectations. Following its monetary policy meeting, the Bank of Japan (BoJ) announced its decision on interest rates. According to the unanimous decision, the short-term interest rate was maintained at 0.50 percent. The decision statement noted that while there are some weaknesses in the Japanese economy, there is a moderate recovery happening, indicated by the improvement in company profits leading to a trend of increasing fixed capital investments. The statement pointed out that inflation expectations were moderately rising, and there is a possibility of the country’s economy performing above its potential growth rate. It was emphasized in the statement that developments in financial and foreign exchange markets and their impact on Japan’s economic activity and prices will be closely monitored, especially with recent shifts in company behavior towards raising wages and prices, which has increased the likelihood of exchange rate movements affecting prices compared to the past.