The Bank of Japan opted to keep interest rates on hold on Thursday as doubts remain over the growth prospects of the global economy and whether Japan’s wage-driven inflation is sustainable.
The decision, which leaves the overnight call rate steady at 0.25 per cent, followed the BoJ’s final two-day monetary policy meeting of 2024.
The meeting straddled Wednesday’s decision by the US Federal Reserve to cut rates by a quarter of a percentage point, but to simultaneously signal a slower pace of rate cuts next year. That move caused the US dollar to rise sharply against the yen, pushing the Japanese currency to a one-month low.
Although market expectations for a rate increase were high going into December, by this week a majority of economists had expected a BoJ hold.
