(MENAFN) On Thursday, the Bank of Japan (BoJ) opted to maintain its policy rate steady at 0.5% for the fourth straight session, citing ongoing "high uncertainties" regarding the effects of US trade policies on both domestic and global economic conditions and price trends, according to media.

This move aligned precisely with market expectations that no rate change would be made.

Compared to its June meeting—when the BoJ described the potential consequences of US tariffs as "extremely uncertain"—the bank’s latest outlook on tariffs is notably less bleak.

The institution highlighted the Japan-US trade agreement as one of the "positive developments" currently shaping the landscape.

"It is therefore necessary to pay due attention to the impact of these developments on financial and foreign exchange markets and on Japan's economic activity and prices," the BoJ stated in its release.

Despite adopting a cautious approach, the BoJ reaffirmed its readiness to hike interest rates further if economic and price conditions show improvement.

Meanwhile, amid persistent food price hikes, the central bank upgraded its inflation forecast for the current fiscal year starting in April.

The BoJ now anticipates core consumer prices—excluding volatile fresh food—to rise by 2.7%, a significant increase from the previous projection of 2.2%, driven largely by climbing costs for rice and other food items.

Looking ahead, the updated forecasts project core CPI growth of 1.8% for fiscal 2026 (up from 1.7% in April) and 2% for fiscal 2027 (rising from 1.9%).

Japan’s economic growth forecast was also slightly raised, with the BoJ expecting a 0.6% expansion in fiscal 2025, up from the earlier 0.5% estimate.

Last week, US President Donald Trump announced the finalization of a trade deal with Japan, which includes a 15% tariff on Japanese exports to the US.

Sharing the development on his Truth Social platform, Trump described it as "perhaps the biggest deal ever made."

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