The Bank of Japan (BOJ) opted to keep interest rates unchanged on Friday, affirming its stance that the economy was progressing steadily towards a modest recovery.
As widely anticipated, the central bank maintained the overnight call rate target at 0.25% through a unanimous vote.
BOJ Governor Kazuo Ueda will convene a news conference at 3:30 p.m. (0630 GMT) to elaborate on the decision.
In a strategic shift, the BOJ ceased negative interest rates in March and elevated its short-term policy rate to 0.25% in July, reflecting their confidence that the probability of inflation consistently reaching the 2% target was increasing.
The policymakers will meet again two more times in October and December, leaving the door open for further rate hike after data showed that inflation in the country has risen higher than expected.
Japan’s core consumer inflation accelerated for the fourth straight month in August and tracked comfortably above the central bank’s 2% target, data showed on Friday, keeping alive expectations for further interest rate hikes.
The data comes hours before the Bank of Japan concludes its two-day policy meeting, where it is widely expected to keep interest rates steady at 0.25%.
The core consumer price index, which excludes volatile fresh food costs, rose 2.8% in August from a year earlier, matching a median market forecast. It followed a 2.7% rise in July.
A separate index stripping away both fresh food and fuel costs, which is scrutinised by the BOJ as a better gauge of demand-driven inflation, rose 2.0% in August from a year earlier. In July, the index was up 1.9%.
