The Bank of Japan (BOJ) has decided to maintain its policy interest rate at the monetary policy meeting held on the 19th.
The central bank will keep the unsecured overnight call rate target at around 0.5%.
Concerns over a global economic slowdown have intensified due to tariff hikes by the Trump administration and retaliatory tariffs from affected countries.
The BOJ is closely monitoring the impact on Japan’s economy and prices.
Governor Kazuo Ueda is scheduled to hold a press conference in the afternoon to explain the policy decision.
The BOJ maintains its stance of raising interest rates if the economy and inflation proceed as expected.
Wage increases among major corporations during the 2025 spring wage negotiations have remained at high levels, similar to the previous year, providing momentum for future rate hikes.
However, if Trump’s additional tariffs extend beyond the already imposed 25% measures on steel and aluminum to include automobiles, it could severely impact Japan’s key industries.
As a result, the central bank is prioritizing close monitoring of the ongoing tariff battle.
Domestically, the rising prices of rice and vegetables continue to strain household budgets.
In January, the overall consumer price index (CPI), which includes fresh food and energy, rose by 4.0% compared to the same month last year.
While the BOJ has decided to keep interest rates unchanged for now, market expectations remain strong that it will move toward a rate hike in the near future.