Bank of Japan keeps interest rates steady at 0.25%

Tokyo, Dec 19, 2024

Synopsis
The Bank of Japan held steady its interest rates on Thursday, opting to observe wage growth and inflation trends. The decision, widely anticipated, maintains the short-term policy rate at -0.1%. Governor Kazuo Ueda will elaborate on this decision and the findings of a policy review examining 25 years of deflation-fighting strategies, marking a potential shift away from extensive stimulus.

The Bank of Japan kept interest rates steady on Thursday, underscoring policymakers' preference to spend more time scrutinising whether wage hikes will broaden and keep inflation durably around its 2% target.

As widely expected, the board decided to keep the BOJ's short-term policy rate unchanged at 0.25% by an 8-1 vote, with board member Naoki Tamura dissenting.

BOJ Governor Kazuo Ueda is expected to hold a press conference at 3:30 p.m. (0630 GMT) to explain the policy decision.

The BOJ also released its findings on the merits and cost of various unconventional monetary easing tools used in its 25-year battle with deflation, in another symbolic step towards ending its massive stimulus. The policy review was initiated by Ueda when he took office in April last year.

[Reuters]