Arabic version: بنك اليابان يُبقي الفائدة عند 1% مع ارتفاع توقعات التضخم

According to Cnbc, the Bank of Japan kept its policy rate unchanged at 1% on Friday while warning that core inflation could move clearly above its 2% target from the second half of fiscal 2026.

The decision was made by an 8-1 vote. Board member Hajime Takata proposed raising the rate to 1.25%. The BOJ said core inflation was likely to accelerate from September through March, the period covered by the second half of its fiscal year.

The central bank cited wage increases being passed on to selling prices, higher crude oil prices and the yen’s recent depreciation. It said inflation should later fall toward 2% as crude oil prices decline. Japan’s core inflation rate was 1.6% in July and had remained below 2% for most of 2026.

The policy decision followed reports that Tokyo intervened to strengthen the yen on Thursday night, alongside U.S. authorities carrying out a “rate check.” The yen had traded around 163 against the dollar before rising as high as 157.96. Masahiko Loo of State Street Investment Management said the Ministry of Finance appeared uncomfortable with excessive yen weakness, describing a possible zone around 162-165 rather than a specific level.

The BOJ said it would continue raising the policy interest rate as underlying inflation approaches 2% and financial conditions remain accommodative. The stated aim is to limit the risk of inflation moving above the price-stability target and harming the economy afterward. Analysts said Governor Kazuo Ueda’s communications would be closely watched for signals on whether future rate increases could accelerate.