The Bank of Japan has decided to stand pat this time, and will keep raising interest rates as economic activity and prices improve as scheduled

March 19 – The Bank of Japan (BOJ) kept its policy rate unchanged at 0.75% on Wednesday, with the policy committee voting 8-1 in favor of the decision, per its monetary policy meeting statement. While some Japanese economic sectors have shown weakness, the overall economy is in a moderate recovery. Exports and industrial production remain generally stable, and corporate profits stay high overall—though the manufacturing sector faces downward pressure from tariffs. Inflation expectations have risen moderately. Supported by overseas economies returning to growth, government economic measures, and a loose financial environment, the benign income-spending cycle is gradually strengthening, enabling the Japanese economy to sustain moderate growth. However, amid rising Middle East tensions, global financial and capital markets are seeing heightened volatility and sharp oil price gains—developments that warrant close monitoring. As the economy continues to improve, labor shortages are expected to worsen, pushing up medium- to long-term inflation expectations. With real interest rates still significantly low, the BOJ said it will keep raising its policy rate as economic activity and prices improve—provided the economic and price outlook outlined in its January outlook report materializes. (Source: Forex Live)