The Bank of Japan (BoJ) maintained its accommodative monetary policy on Friday. This puts the rate of the country’s central bank at odds with that of other central banks worldwide, which are raising interest rates to curb sky-high inflation.
For example, the US Federal Reserve announced its strongest rate hike in nearly 30 years this week when it raised rates by 0.75 percentage points. Interest rates also rose in Switzerland and the United Kingdom.
The European Central Bank also faces its first interest rate hike in years. Central banks are thus trying to combat the sky-high fuel and food prices as a result of the war in Ukraine.
The BoJ’s decision to keep interest rates at minus 0.1 percent is part of a decade-old plan to boost the world’s third-largest economy. Policymakers in Tokyo noted that they would pay “due attention” to the currency markets.
The widening gap between Japanese and US policies caused the Japanese currency to hit its lowest level against the dollar this week since 1998.
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