Japan's central bank holds steady on key interest rate

Vehicles are parked for export at a Yokohama port, near Tokyo on Aug. 1, 2025. (Takuto Kaneko/Kyodo News via AP)
Vehicles are parked for export at a Yokohama port, near Tokyo on Aug. 1, 2025. (Takuto Kaneko/Kyodo News via AP)
Carbonatix Pre-Player Loader

Audio By Carbonatix

TOKYO (AP) — Japan’s central bank kept its key interest rate unchanged at 0.5% Friday, in a decision that was widely expected, given recent inflation trends that have stayed above target.

The Bank of Japan issued its decision on the overnight call rate after a two-day meeting by its policy board.

“Japan’s economy has recovered moderately, although some weakness has been seen in part. Overseas economies have grown moderately on the whole,” it said in a statement.

The U.S. Federal Reserve cut its policy rate by 0.25 percentage points earlier this week, the Fed’s first cut since December, and lowered its short-term rate to about 4.1%, down from 4.3%.

Japan had been ailing from deflationary trends in recent years, but prices are gradually rising. Recent government data show consumer prices rising above the central bank’s target of 2%, at between 2.5% and 3%.

The Bank of Japan noted exports will be hit by higher tariffs, which have come about because of U.S. President Donald Trump’s policies. There was an increase in trade in anticipation of the tariffs, but those rises are now tapering off, it said.

Also mentioned as a risk factor was the uncertainty in domestic politics. Prime Minister Shigeru Ishiba is stepping down, and the ruling party is holding an election to choose a new leader.

Five candidates are expected to enter the race, with a party vote coming early next month. The grip on power by the Liberal Democratic Party, which has ruled postwar Japan almost incessantly, appears to be unraveling lately.

The Japanese stock market has been booming recently, with the benchmark Nikkei 225 hitting another record Thursday, cheered by the Fed’s rate cut. Shares were falling slightly in Friday morning trading.

___

Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

 

Salem News Channel Today

Sponsored Links

On Air & Up Next

  • Moore Money
    3:00PM - 4:00PM
     
    Famed economist and author, Steve Moore, brings insight to the topic of money and government every Saturday.
     
  • Black and Right
    4:00PM - 7:00PM
     
    Former legislator and law enforcement officer John Anthony exposes the myths of   >>
     
  • The Un-Safe Space with Jenny McGuire
     
    Jenny McGuire is the bold, unapologetic voice behind The Un-Safe Space, where   >>
     
  • Hollywood 360
    8:00PM - 12:00AM
     
    Spend time with Carl Amari and Lisa Wolf as they showcase Hollywood's past and present./p>
     
  • Ark Midnight
    12:00AM - 3:00AM
    Ark Midnight
    214-747-7777
     
    John B. Wells captivates listeners with discussions on news and current events,   >>
     

See the Full Program Guide