The Bank of Japan decided to keep its benchmark interest rate steady at 0.25% today. The central bank highlighted that Japan’s economy has shown moderate recovery, although some weaknesses persist. It acknowledged that there are still significant uncertainties regarding the country’s economic activities and prices.
The bank noted that recent shifts in business behavior, including rising wages and prices, are contributing to more volatility in exchange rate impacts. This is in contrast to past trends, where exchange rate fluctuations had less influence on prices.
Japan’s headline inflation stood at 2.3% in October, marking the 30th consecutive month that inflation has exceeded the central bank’s 2% target. This persistent inflation has been a key focus for the Bank of Japan as it manages its monetary policy.
Despite the challenges posed by rising prices, the employment and income situation in Japan has shown modest improvement. The central bank observed that private consumption continues to rise moderately, even in the face of price increases and other economic pressures.
The statement also reflected the ongoing complexity of balancing economic recovery with inflation control, as the Bank of Japan continues to navigate high uncertainties and the evolving economic landscape.
