Financial News: Bank Of Japan Keeps Policy Rate Unchanged

Bank Of Japan Keeps Policy Rate Unchanged

03/19/2026 - 03:02:00 (RTTNews)

(RTTNews) - The Bank of Japan maintained its interest rate on Thursday and signaled policy tightening if economic activity and inflation evolve as estimated.

The policy board, headed by Ueda Kazuo, decided by 8-1 majority vote, to hold the interest rate at around 0.75 percent. The outcome widely matched expectations.

At the meeting, the lone dissenter, Takata Hajime proposed to raise the interest rate by 25 basis points as he assessed that the price stability target had been more or less achieved and that risks to prices in Japan were skewed to the upside.

The bank had raised its interest rate by 25 basis points to the current level in December 2025.

The board expects core inflation to temporarily decelerate to a level below 2 percent, with the waning of the effects of the rise in food prices, partly due to the effects of government measures to address rising prices.

However, inflation is then expected to come under upward pressure, affected by the recent rise in crude oil prices due to the conflict in the Middle East, the board said.

It is projected that a sense of labor shortage will grow as the economy continues to improve and that medium- to long-term inflation expectations will rise, the bank noted.

If the outlook for economic activity and prices develop as estimated in the January Outlook Report, the bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation, the bank said.

The board said it will conduct monetary policy as appropriate in response to developments in economic activity and prices and financial conditions with a view to achieve sustainable and stable inflation target.

The policy decision came after the US Federal Reserve left its benchmark interest rate unchanged on Wednesday. The target range of the federal funds rate was retained at 3.50 percent to 3.75 percent. The Fed said the implications of developments in the Middle East for the U.S. economy are uncertain.

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