Bank of Japan Maintains Interest Rate

(MENAFN) The Bank of Japan maintained its key interest rate at 0.5% on Friday, aligning with investor forecasts, as the country's inflation slowed to its weakest point since November 2024.

In an official release, the central financial authority noted that price growth expectations have risen "moderately," while core inflation ranged between 2.5% and 3%, influenced by climbing food costs.

The monetary institution also stated that the influence of increasing food expenses, especially rice, is projected to diminish.

The resolution to keep the rate steady was reached through a 7-2 vote, with the two opposing members proposing a hike to 0.75%.

This marks the fifth consecutive policy meeting where interest levels were left unchanged, with the previous rate rise taking place in January. Nevertheless, the bank has expressed readiness to consider future increases based on economic developments.

The move follows data showing that Japan's core inflation — excluding fresh food — dropped to 2.7% in August, the lowest rate since November 2024.

The August inflation data met analyst predictions and represented a third month of decline.
Similarly, overall inflation eased to 2.7% from 3.1% in July, marking the slowest pace since November 2024.

The "core-core" inflation metric, which strips out both energy and fresh food prices and is closely monitored by the Bank of Japan, slipped slightly from 3.4% in July to 3.3%.

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