Exchange rate data from financial markets

Bank of Japan Holds Rates at 0.25%, Tamura Dissents; Yen Weakens to 155

Dec 19, 2024, 02:57 AM

The Bank of Japan (BOJ) has decided to keep its policy rate unchanged at 0.25%, maintaining its short-term interest rate target despite market expectations of a possible rate hike. The decision was made by an 8-1 vote, with board member Tamura dissenting and proposing an increase to 0.5%. The BOJ noted that Japan's economy is recovering moderately despite some weaknesses, but high uncertainty remains regarding economic activity and prices. The central bank projects that inflation will align with its 2% target in the second half of its three-year projection period through fiscal 2026. The BOJ also observed that the impact of foreign exchange fluctuations on inflation may be greater now due to changes in corporate wage and price-setting behaviors. Following the announcement, the Japanese yen weakened to 155 against the US dollar, reaching its lowest level since November. The BOJ announced a comprehensive review of its previous monetary easing measures and emphasized its commitment to achieving its 2% inflation target in a sustainable and stable manner.