BOJ to keep interest rates unchanged

Nov 01, 2024 | News On Japan

Nov 01, 2024 (NHK) - The Bank of Japan decided to keep short-term interest rates unchanged in its two-day policy meeting that ended on Thursday.

The central bank said it will maintain the current monetary policy with the key interest rate steady at around 0.25 percent.

Policymakers apparently judged that for now they will keep an eye on wage and price trends as well as the future of the US economy ahead of the presidential election.

The BOJ also released its quarterly consumer inflation report. It maintains its forecast of 2.5 percent for fiscal 2024, which started in April. But it downgraded its outlook for the next fiscal year to 1.9 percent, compared to the July prediction of 2.1 percent.

The BOJ cited the recent decline in crude-oil prices as a major factor.

The bank expects 1.9 percent for fiscal 2026 as well.

The figures represent median projections from BOJ policymakers for the consumer price index, which excludes fresh food.

The bank says the CPI will likely be at a level consistent with its 2-percent stability target in the second half of the fiscal 2024 to 2026 projection period.

BOJ Governor Ueda Kazuo said after the meeting that if the outlook for economic activity and prices is realized, the bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation.

Ueda said: "We have no prejudgment on the timing of rate hikes. We will make policy decisions by updating the assessment and outlook for prices based on various data and information available at the time of each board meeting."

Ueda also touched on the US economy. He said new risks could emerge, depending on the policies of a new president, even if wages and consumption remain strong for the time being.

He added that BOJ policymakers will check those risks at future meetings.

Some market players believe that political uncertainty in Japan following the Lower House election will make it difficult for the BOJ to raise the benchmark interest rate in the future. The ruling coalition lost its majority while the opposition saw significant gains.

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