Bank of Japan Rate Decision LIVE: Amid escalating tensions in the Middle East, rising crude oil prices, and growing risks of an inflation spike, the Bank of Japan is set to announce its interest rate decision on March 19.
The BoJ is widely expected to keep rates unchanged following its two-day policy meeting, although uncertainty around the future rate trajectory has increased as the Middle East conflict adds to domestic inflationary pressures. As recently as last month, there were expectations of further rate hikes, continuing the central bank’s policy normalisation that began in 2024 after nearly 17 years of ultra-low or negative interest rates.
In its December policy, the BoJ raised its key rate by 25 basis points to 0.75%, the highest level since September 1995, marking a significant milestone in its tightening cycle. Earlier, on March 19, 2024, the central bank had ended its negative interest rate regime by raising the benchmark rate to a range of 0% to 0.1% from -0.1%. This was followed by another hike to 0.25% on July 31, 2024, and then to 0.50% on January 24, 2025.
For years, Japan maintained near-zero or negative interest rates to combat deflation, even as other major central banks tightened policy post-pandemic. However, rising inflationary pressures have prompted a shift in stance, despite the economy contracting at an annualised rate of 2.3% in the latest quarter.
Markets are now closely tracking the BoJ’s policy outcome and commentary for cues on the future rate path and its potential impact on global financial markets.
