TOKYO – In its latest monetary policy review, the Bank of Japan (BOJ) has opted to maintain its policy interest rate at 0.25 percent, signaling a cautious approach towards the country’s economic recovery.
According to Philippines News Agency, the BOJ, in an official statement on Friday, indicated a moderate recovery in the Japanese economy, though acknowledging existing weaknesses. The central bank’s assessment pointed out that exports and industrial production have remained flat. However, improvements in employment and income conditions have spurred private consumption, which is on a moderate upward trend. Conversely, housing investment was noted as relatively weak, and public investment has not shown significant changes.
The BOJ further commented on the financial environment, describing it as accommodative. On the inflation front, the bank noted, “The year-on-year rate of increase in the consumer price index has been in the range of 2.5-3.0 percent recently, as services prices have continued to rise moderately.” This reflects factors such as wage increases, although the bank also observed that the pass-through effects of cost increases driven by previous rises in import prices have begun to wane.
The decision to maintain the interest rate follows a period of cautious adjustments, with the rate having been increased from minus 0.1 percent, where it had been held since 2015, to 0.1 percent in March, and subsequently to 0.25 percent in July—the highest level since the end of 2008.
The bank’s steady approach comes amid fluctuating global economic conditions and is part of a broader strategy to ensure sustained economic growth while managing inflationary pressures effectively.