Bank of Japan hits pause on rate hikes at 0.75%
The Bank of Japan just kept its main interest rate steady at 0.75%, after a recent hike took it to the highest level in 30 years.
They're taking a breather to see how the economy handles these changes before making any more moves.
Growth and inflation: Upward tweaks to forecasts
Japan's central bank is feeling a bit more optimistic, bumping up its growth forecast to nearly 0.9% and expecting inflation (core CPI) to average 2.7% over an unspecified forecast horizon—with the growth forecast revised up while the inflation forecast was unchanged.
Why all the caution?
BOJ leaders want prices stable around 2%, and they think stronger company profits are finally pushing wages up—a good sign.
But with real interest rates still negative, there's some worry about whether these steps are enough.
Politics, yen troubles, and what's next
Japan's political scene is shaky with snap elections and new tax cut promises raising eyebrows about future spending.
Plus, the yen keeps losing ground against the dollar (around USD/JPY 159), which could make imports pricier—and might push back any further rate hikes as the BOJ pauses to assess the effects of prior moves.