Bank of Japan holds rates steady at 0.25%, markets await next steps

The Bank of Japan (BOJ) opted to keep its target interest rate at 0.25%, following a two-day policy meeting on Thursday. This move aligns with market expectations, as roughly half of the analysts polled earlier this month anticipated a pause in rate hikes.

Recent media reports suggesting a hold had shifted market sentiment in the past week. However, the central bank’s decision comes amidst growing speculation about whether rates might rise to 0.5% in the near future or remain steady until the January meeting.

This pause follows significant monetary shifts earlier this year, with the BOJ ending negative rates in March—its first increase since 2007—and a surprise hike to 0.25% in July.

BOJ Governor Kazuo Ueda is expected to provide further insights into the bank’s decision and its policy trajectory during a news conference later today, as markets remain watchful for any signals of future moves.

The decision underscores the central bank’s cautious approach as it balances economic recovery and inflationary pressures in Japan.

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