Tokyo March 19 2025: The Bank of Japan kept interest rates steady on Wednesday in a widely expected move, as policymakers chose to spend more time gauging how prospects of higher U.S. tariffs would affect the export-reliant economy.
The decision came as fears of a global slowdown caused by U.S. President Donald Trump’s tariff policy overshadow wage and price data showing Japan making progress in durably achieving the BOJ’s 2% inflation target.
Highlighting the conflicting challenges, the central bank said rising rice costs would push up inflation at home while trade policies of other countries cast doubts over Japan’s economic outlook.
“Concerning risks to the outlook, there remain high uncertainties surrounding Japan’s economy and prices including the evolving situation regarding trade and other policies in each jurisdiction,” the BOJ said in a statement.
Having just raised interest rates in January, the board voted unanimously to maintain the bank’s short-term policy rate at 0.5% at a two-day meeting that ended on Wednesday.
