Cautious Strategy: Bank of Japan Holds Steady on Interest Rates

The Bank of Japan maintained its interest rates at 0.25%, preferring a cautious approach amidst uncertainties surrounding U.S. economic policies under president-elect Donald Trump. While one board member proposed a rate increase, this was rejected. Market players are observing closely for potential future rate hikes.

The Bank of Japan (BOJ) decided to keep interest rates unchanged at 0.25%, reflecting a prudent stance as the global economic stage remains unpredictable amid new U.S. leadership under president-elect Donald Trump.

Despite hawkish pressure from board member Naoki Tamura, who proposed a rate hike to 0.5% citing rising inflationary risks, the board maintained its position. The central bank indicated that the economy is growing moderately but faces significant uncertainties, especially in light of recent U.S. Federal Reserve actions.

BOJ Governor Kazuo Ueda's forthcoming press conference is closely watched for any hints on potential rate adjustments in early 2023. The economic landscape shows a growing inclination among companies to increase wages, which could support future rate hikes, although external factors like China's demand and U.S. policies present challenges.

(With inputs from agencies.)