BOJ Holds Rate at 1%, Signals Further Rises Possible Amid Inflation Concerns
The Bank of Japan (BOJ) maintained its short-term policy rate at 1% on Friday, signaling that borrowing costs could rise further if inflation risks increase.
After a two-day meeting, the Policy Board voted 8-1 to keep the rate unchanged. Hajime Takata dissented and proposed a 25-basis-point increase to 1.25%, but his proposal was rejected.
The decision came after the yen rose sharply against the dollar during New York trading on Thursday, with the currency being lifted from its weakest level in four decades. The operation produced the largest one-day advance against the dollar in almost two years.
Economists interpreted the BOJ's accompanying outlook as relatively firm, with Kazutaka Maeda noting that the central bank had slightly upgraded its economic outlook, giving it further grounds to continue raising rates.