Japan’s central bank on Wednesday raised its policy interest rate to around 0.25 percent from the previous range of around zero to 0.1 percent, and outlined a plan to taper its bond-buying program.
At a two-day policy meeting, Bank of Japan’s (BOJ) Governor Kazuo Ueda and his eight board colleagues decided the first rate hike since March, when it scrapped the negative interest rate policy for the first time in 17 years. It also marked the highest short-term interest rate since 2008.
Japan’s economic activity and prices have been developing generally in line with the BOJ’s outlook, and the bank “judged it appropriate to adjust the degree of monetary accommodation from the perspective of sustainable and stable achievement of the price stability target of 2 percent,” the central bank said in a statement released after the policy meeting.
As for the future conduct of monetary policy, the BOJ said that if the current BOJ’s outlook for economic activity and prices are realized, it will “accordingly continue to r
aise the policy interest rate and adjust the degree of monetary accommodation.” The board also decided to taper its purchases of Japanese government bonds to JPY 3 trillion (USD 19.7 billion) per month by March 2026, compared with the current JPY 6 trillion (USD 39.4 billion). The central bank said it will reduce scheduled monthly bond buying by about JPY 400 billion (USD 2.6 billion) every quarter.
Meanwhile, in its outlook report published after the meeting, the BOJ raised its outlook for core inflation, which excludes volatile fresh food, for fiscal 2025 to 2.1 percent, up from its previous forecast of a 1.9 percent increase.
Source: Kuwait News Agency
