At its meeting that concluded this morning, Friday, March 19, the Bank of Japan decided to maintain its monetary policy and interest rates unchanged. Members voted 8-1 to keep the interest rate at 0.75% for the second consecutive meeting, as expected, following a 25 basis point increase in December to its highest level in three decades. Member Hajime Takata favored raising the rate to 1%, citing the risk of rising prices.

The bank’s statement indicated that it expects core inflation to temporarily slow to below 2% in the near term due to a slowdown in rice price increases. However, the conflict in the Middle East could exert upward pressure on inflation, given rising oil prices and their direct impact on inflation.