Bank of Japan raises the benchmark interest rate to around 0.25 percent
Istanbul, July 31 (Hibya)—Japan’s central bank has raised its benchmark interest rate to “around 0.25 percent” from 0.0 percent to 0.1 percent and outlined its plan to taper its bond-buying program.
The Bank of Japan expects real interest rates to remain “significantly negative,” adding that “accommodative financial conditions will continue to support economic activity firmly.”
The central bank forecasts that the core inflation rate—excluding fresh food prices—will reach 2.5 percent by the end of the 2024 fiscal year and “around 2,0 percent” for the 2025 and 2026 fiscal years.
The BOJ said it will continue to raise the policy interest rate and adjust the degree of monetary accommodation, assuming its economic outlook is realized.
Japan’s fiscal year runs from April 1 to March 31, which means the 2024 fiscal year will end in March 2025.
However, the central bank emphasized that it would be flexible in this plan and would conduct an interim assessment of the reduction plan at the June 2025 meeting.
“The Bank will respond nimbly by, for example, increasing the amount of JGB purchases” and added that it is “prepared to amend the plan at the MPMs if deemed necessary.”
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