Japan holds interest rates, but hints at tightening
Japan's central bank just kept its main interest rate at 0.5%, holding off on a hike for now—just as most experts expected.
But there's a twist: the Bank of Japan plans to start selling off some financial assets it bought to keep rates low, hinting that tighter money policies might be around the corner.
Bank of Japan is worried about slow economic growth
Inflation in Japan dipped to 2.7% recently, helped by government energy subsidies, but rice prices have shot up by about 68.8% year-on-year.
Even with this dip, inflation is still above the bank's 2% target—so analysts think a rate hike could happen later this year or in early 2026.
The bank is also worried about slow economic growth and weaker profits for Japanese companies, partly because of shaky global markets and tough trade conditions.