Bank of Japan holds interest rate at 0.25%, eyes economic outlook

The Bank of Japan (BoJ) unanimously decided to keep its key short-term interest rate at approximately 0.25% during its October meeting, maintaining the highest level since 2008 and aligning with market expectations.

Bank of Japan holds interest rate at 0.25%, eyes economic outlook

This decision comes amid a changing political landscape following Japan's recent election and in the lead-up to the US presidential election. Governor Kazuo Ueda expressed concerns about the increasingly uncertain global economic outlook, noting that the central bank has time to assess risk factors after implementing rate hikes in March and July. If financial and price data align with forecasts, the policy board remains committed to additional rate increases.

BoJ maintains 2.5% inflation forecast for FY 2024, GDP growth at 0.6%

In its quarterly outlook, the BoJ maintained its prediction for core inflation to reach 2.5% in FY 2024, with inflation expected to hover around 1.9% for FY 2025 and FY 2026. The central bank also retained its 2024 GDP growth forecast at 0.6%, with projected growth of 1.1% for FY 2025 and 1.0% for FY 2026.