The Bank of Japan (BOJ) is set to maintain its benchmark interest rate during its two-day policy meeting starting Thursday. The decision comes after the BOJ's rate hike in September, as policymakers continue to evaluate the economic impact of that move. The central bank will also release its latest economic and price outlook amid rising oil costs and food prices driven by companies passing on higher expenses.
Governor Ueda Kazuo previously indicated that the BOJ's policy approach has shifted from targeting 2% inflation to stabilizing it at that level. Investors will closely monitor the meeting for any hints about the future pace of rate increases.
The BOJ's meeting follows a two-day policy session of the US Federal Reserve, which begins Tuesday. The Fed raised rates in September for the first time in over three years, and while investors anticipate another hike before year-end, several Fed officials have emphasized the need for more time to assess the recent move. As a result, markets expect the Fed to keep rates unchanged this week.
Adding to the week's central bank activity, the European Central Bank will hold its policy-setting meeting on Thursday.