(MENAFN- IANS) Tokyo, Oct 31 (IANS) The bank of Japan (BOJ) decided Thursday to maintain its current monetary policy, keeping the interest rate steady at around 0.25 per cent as it highlighted the need for caution in light of domestic and international economic uncertainties.
The BOJ cited the need to carefully monitor domestic wage and price trends as well as the future outlook of the US economy, especially the impacts of the upcoming US presidential election.
The BOJ ended negative interest rates in March and hiked short-term rates to 0.25 per cent in July, in a landmark shift away from a decade-long monetary stimulus aimed at spurring inflation and economic growth.
Market analysts note that recent political uncertainty in Japan, particularly after the recent House of Representatives election, may pose challenges for the BOJ to advance further rate hikes.
In a press conference on Thursday afternoon, BOJ Governor Kazuo Ueda emphasized a conditional approach to potential interest rate hikes, stating that if Japan's economic and price outlook aligns with BOJ projections, the bank will continue to raise the policy rate accordingly and adjust the level of monetary easing as needed.
Ueda called for caution, particularly regarding developments in overseas economies, especially the United States, and shifts in financial markets, which could impact Japan's economic stability and price outlook, Xinhua news agency reported.
Regarding the timing of future rate hikes, Ueda clarified that the BOJ has no predetermined schedule and will make policy decisions based on up-to-date data, assessing economic conditions and price projections at each policy meeting.
For fiscal year 2024, the BOJ forecasted a 2.5 per cent increase in the consumer price index, excluding fresh foods, unchanged from July's estimate.
For 2025, the BOJ adjusted its projection to 1.9 perc ent, down by 0.2 percentage points, citing falling resource prices, including crude oil, as a primary factor. The 2026 outlook remains at a 1.9-per cent increase, in line with prior projections.
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