Bank of Japan Keeps Interest Rates Steady Amid Global Economic Slowdown Concerns
The Bank of Japan kept interest rates steady on Wednesday in a widely expected move, as policymakers chose to take more time to assess the impact of potential U.S. tariff hikes on the export-dependent economy.
The decision comes amid growing concerns over a global economic slowdown caused by U.S. President Donald Trump’s trade policies, which overshadow wage and price data indicating that Japan is making progress toward the central bank’s goal of achieving a sustained 2% inflation target.
Highlighting the conflicting challenges, the central bank noted that rising rice costs could push inflation higher domestically, while trade policies in other countries create uncertainties about Japan’s economic outlook.
“Regarding risks to the outlook, significant uncertainties remain surrounding the Japanese economy and prices, including the evolving situation in trade and other policies across different jurisdictions,” the bank said in a statement.
After raising interest rates in January, the board unanimously voted to keep the short-term interest rate at 0.5% following a two-day meeting that concluded on Wednesday.
