Bank of Japan Holds Interests Rates

Important Headlines

  • BOJ GOV UEDA: U.S. ECONOMY SOFT LANDING IS OUR MAIN SCENARIO
  • BOJ GOV UEDA: JAPAN’S INTEREST RATE IS PROBABLY STILL LOWER THAN NEUTRAL RATE DESPITE TWO RATE HIKES
  • BOJ GOV UEDA SAYS WILL MAKE DECISION IN TERMS OF WHICH PATH IS MOST DESIRABLE TO ACHIEVE INFLATION TARGET, WHEN ASKED ABOUT NEEED TO CONTINUE MONETARY EASING
  • BOJ GOV UEDA: WILL ANALYSE HOW US ECONOMY WILL IMPACT NEXT WAGE NEGOTIATIONS NEXT SPRING
  • BOJ GOV UEDA: MUST CLOSELY CHECK IMPACT OF RATE HIKES WHEN GETTING CLOSER TO THE RANGE OF ESTIMATED NEUTRAL RATES

On September 20, 2024, the Bank of Japan (BoJ) decided to keep its key interest rate unchanged at 0.25%, maintaining its cautious approach to monetary policy.

This decision followed a significant rate hike in July 2024, which marked the end of the BoJ’s long-standing negative interest rate policy.

The bank’s pause in raising rates is aimed at balancing inflationary pressures and Japan’s moderate economic recovery.

Although inflation remains above the BoJ’s 2% target—core CPI reached 2.8% in August—the central bank opted for stability to avoid further currency volatility and to support growth. The yen had been weakening, which caused some concern about its effect on trade.

Markets largely expected this move, with analysts predicting that the BoJ would refrain from further adjustments for now, though it remains vigilant regarding future inflationary risks and currency movements​