Date: 13-may-2025 | By: Nuztrend Team
In its latest policy meeting on May 13, 2025, the Bank of Japan (BOJ) announced that it will maintain the country's benchmark interest rate at 0.5%. The decision reflects the central bank’s cautious optimism as Japan continues to navigate inflation trends, a tight labor market, and mounting global trade tensions—especially in light of recent U.S. tariff increases.
The BOJ acknowledged external pressures stemming from international trade disruptions, particularly new U.S. tariffs that have complicated global supply chains. However, Governor Kazuo Ueda stated that domestic indicators remain largely resilient. Japan's strong labor market and modest wage increases have provided a foundation for sustained consumer spending and gradual inflation gains.
The central bank reiterated its commitment to achieving a stable inflation rate of 2%, a goal that has proven elusive for over a decade. Recent data indicates core inflation hovering near 1.7%, prompting speculation that the BOJ may shift toward a more hawkish stance in upcoming quarters.
Though no immediate rate changes are planned, policymakers have left the door open for gradual hikes if inflation edges closer to the 2% mark and wage growth proves sustainable.
Financial markets responded with mild volatility following the BOJ announcement. The yen remained stable against the dollar, while Japanese equities saw slight gains led by domestic consumer stocks. Economists predict the BOJ will maintain its current stance through the summer unless inflation accelerates unexpectedly.
As Japan carefully balances domestic growth with global economic uncertainty, all eyes will remain on the BOJ’s next move in the second half of 2025.
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