Just announced, no interest rate hike!!!
Just now, the Bank of Japan announced a big news: they decided not to raise interest rates, and keep the current interest rate unchanged at 0.25%. This decision is the same as everyone guessed before.
Why did the Bank of Japan do this? They think that Japan's economy is slowly getting better, but it is not time to raise interest rates yet. Moreover, the recent fluctuations in the exchange rate of the yen have reduced the pressure of price increases, so they think they can wait a little longer.
Kazuo Ueda, the boss of the Bank of Japan, also said that if Japan's economy and prices develop as they expect, they will continue to raise interest rates. But now, they think there is still time to take it slow.
Prices in Japan have risen very fast recently, and have accelerated for four consecutive months, which is higher than the 2% target set by the Bank of Japan. But Kazuo Ueda said that they think this rising trend can be controlled.
The market reaction is also very interesting. As soon as the Bank of Japan's decision came out, the exchange rate of the yen against the US dollar rose, but after Kazuo Ueda spoke, the yen fell a little again. The Japanese stock market rose quite happily at first, but then the increase narrowed.
Some experts predict that the Bank of Japan may raise interest rates again later this year or early next year. But it is hard to say, it depends on the situation of the economy and financial markets.
In general, the Bank of Japan is taking a step-by-step approach now. They want to ensure that the economy is stable and prices are under control before deciding what to do next.
