Bank of Japan holds rates steady; Yen falls

The Bank of Japan held interest rates unchanged at 0.25%, in line with expectations, sending the yen to a one-month low.

Its nine-member board voted 8-1 to hold the short-term policy rate. Dissenting board member Naoki Tamura, who is a known hawk on policy, wanted it lifted to 0.5% because he felt inflationary risks were building.

The yen touched a one-month low of 155.48 to the dollar. Hours earlier, the US Federal Reserve cut interest rates but indicated a more cautious path of easing in 2025, hitting global share markets.

BoJ Governor Kazuo Ueda said real interest rates remained very low but acknowledged fresh risks to the outlook from the proposed trade policies of incoming US President Donald Trump, including big tariffs on China.

"If the economy and prices move in line with our forecast, we will continue to raise our policy rate," Ueda told a news conference. "As for the timing of adjusting the degree of monetary support, we need to scrutinise various data carefully in reaching a decision."

Reporting by Frank Prenesti for Sharecast.com