The headquarters of the Bank of Japan (BOJ) is seen beyond the cherry blossoms in Tokyo on March 20, 2023.
Kazuhiro Nogi Afp | Getty Images
The Bank of Japan kept its benchmark interest rate at 0.25% on Thursday.
The decision comes a day after the US Federal Reserve cut base rates by 25 basis points, taking the federal funds rate to 4.25%-4.5%.
The yen It weakened by 0.16% against the dollar after the rate decision, trading at 155.06.
The BOJ said in its statement that the decision to hold was an 8-1 decision, with board member Naoki Tamura advocating a 25-point hike.
The central bank warned, however, that “significant uncertainties remain around Japan’s economic activity and prices.”
Therefore, in his opinion, it was necessary to “give due attention” to the evolution of the financial and foreign exchange markets and their impact on economic activity and prices in Japan.
“In particular, as the behavior of companies is changing more recently to raise wages and prices, the evolution of the exchange rate, compared to the past, is likely to affect prices,” the bank added.
The BOJ’s decision was in line with a CNBC poll in which 13 of 24 economists said they expected the BOJ to change its key interest rate in December before raising rates at its next meeting in January.
The survey was conducted between December 9 and 13, before the Fed signaled that there would be fewer rate cuts in 2025.
A December 13 note from Citi predicted that the BOJ will raise rates three times in 2025, bringing the rate to 1%.
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