Bank of Japan leaves interest rates unchanged

March 20, 2007
By Ken Worsley

In a move nearly universally anticipated, shortly after lunchtime the Bank of Japan declared that it would leave the nation’s overnight call rates unchanged at 0.5%. The decision had been predicted by all 49 economists surveyed by Bloomberg.

BOJ Governor Toshihiko Fukui is set to speak with the press in a couple of hours.

With April unified elections coming up and a July upper house election, it seems unlikely that the BOJ will be able to raise rates again until sometime after those events pass (with the upper house election bearing far more importance to the BOJ’s decision). There thus becomes the possibility towards the end of the year of both a hike in interest rates and an increase in the consumption tax from 5 to 10 percent.

Filed Under Bank of Japan, Interest Rates