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TOKYO, Sept. 20 (Xinhua) — The Bank of Japan (BOJ) decided to keep its key interest rate unchanged at around 0.25 percent on Friday, as its chief said the central bank still has time to assess when it needs to raise borrowing costs further.
At the end of a two-day monetary policy meeting, BOJ board members voted unanimously to hold steady the central bank’s target of guiding the uncollateralized overnight call rate to around 0.25 percent.
BOJ Governor Kazuo Ueda told a press conference after the meeting that economic indicators have so far met with the BOJ’s expectations, saying that the bank will increase interest rates if the economy and prices move on track.
Ueda also said the risk of rising inflation due to a weak yen is waning and that “we now have more time to assess” if further monetary tightening is necessary, a comment that weakened the yen by tempering market speculations about another possible rate hike within the year.
The BOJ ended negative interest rates in March and hiked short-term rates to 0.25 percent in July, in a landmark shift away from a decade-long monetary stimulus aimed at spurring inflation and economic growth.
The July decision, together with follow-up remarks by Ueda about a possible further rate hike within the year, led the benchmark Nikkei 225 stock average to mark its biggest single-day fall in early August.
The BOJ’s cautiousness toward additional rate hikes highlights the tough balance it must strike between normalizing policy after years of unorthodox monetary easing measures and minimizing negative impacts on the economy in the process of doing so, local media reported. ■