<\/p>\n\n\n\n
The Bank of Japan kept interest rates unchanged on Thursday, in line with expectations, while signaling growing caution over inflation risks tied to rising energy prices amid the ongoing Middle East conflict.<\/p>\n\n\n\n
The central bank left its overnight call rate at 0.75%<\/strong>, with the decision backed by nearly all members of its nine-member board. Hajime Takata<\/strong> was the sole dissenter, advocating for a 25 basis point rate hike<\/strong> due to upside risks to inflation.<\/p>\n\n\n\n The BOJ highlighted increasing risks to medium- and long-term inflation, pointing to the recent surge in crude oil prices as a key driver.<\/p>\n\n\n\n \u201cThe rate of inflation is expected to come under upward pressure, affected by the recent rise in crude oil prices,\u201d the central bank said in its statement.<\/p>\n\n\n\n Higher energy costs are expected to feed into living expenses, adding pressure on households and complicating the inflation outlook.<\/p>\n\n\n\n Despite near-term concerns, the BOJ reiterated that inflation is likely to cool in the short term<\/strong>, supported by easing food price pressures and government measures aimed at stabilizing energy and food costs.<\/p>\n\n\n\n However, inflation is projected to pick up again later in 2026<\/strong>, with underlying consumer price growth expected to reach the central bank\u2019s 2% target<\/strong>.<\/p>\n\n\n\n Thursday\u2019s decision reflects the BOJ\u2019s cautious stance as it awaits clearer signals from the domestic economy\u2014particularly wage growth<\/strong>, which remains a critical factor in shaping inflation dynamics.<\/p>\n\n\n\n Ongoing spring wage negotiations are being closely monitored, as sustained increases in wages could provide the necessary conditions for further policy tightening.<\/p>\n\n\n\n The BOJ has already raised rates by a cumulative 85 basis points since early 2024<\/strong>, marking a significant shift away from its long-standing ultra-loose monetary policy.<\/p>\n\n\n\n Analysts at Capital Economics<\/strong> expect the central bank to deliver its next 25 basis point hike in April<\/strong>, assuming economic conditions remain supportive.<\/p>\n\n\n\n The Japanese yen<\/strong> showed little immediate reaction to the decision, but remained near its weakest levels since mid-2024.<\/p>\n\n\n\n Meanwhile, Japan\u2019s Nikkei 225 index<\/strong> fell 2.5%<\/strong>, tracking broader declines across Asian markets.<\/p>\n\n\n\n Investors are now turning their attention to comments from BOJ Governor Kazuo Ueda<\/strong>, who is set to speak later in the day. His remarks are expected to provide further insight into the central bank\u2019s policy outlook.<\/p>\n\n\n\n While the BOJ opted to hold rates for now, its messaging suggests a growing readiness to tighten policy if inflationary pressures\u2014particularly from energy prices\u2014continue to build.<\/p>\n","protected":false},"excerpt":{"rendered":" The Bank of Japan kept interest rates unchanged on Thursday, in line with expectations, while signaling growing caution over inflation risks tied to rising energy prices amid the ongoing Middle East conflict. The central bank left its overnight call rate at 0.75%, with the decision backed by nearly all members of its nine-member board. Hajime …<\/p>\n","protected":false},"author":9,"featured_media":95737,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[6827,49,37,36],"tags":[],"class_list":["post-124828","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-daily-economic-reports","category-economic-reports","category-forex-markets","category-market-updates"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/124828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=124828"}],"version-history":[{"count":1,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/124828\/revisions"}],"predecessor-version":[{"id":124829,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/124828\/revisions\/124829"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/95737"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=124828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=124828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=124828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Oil prices raise inflation concerns<\/h3>\n\n\n\n
Inflation outlook remains mixed<\/h3>\n\n\n\n
Rate path depends on wages and growth<\/h3>\n\n\n\n
Markets eye next move<\/h3>\n\n\n\n
Focus shifts to Ueda<\/h3>\n\n\n\n
Outlook<\/h3>\n\n\n\n