Overview:
The Bank of Japan is expected to maintain its current monetary policy at its Monetary Policy Meeting scheduled for this month. This is because the Bank has just raised interest rates in January and is taking a cautious stance toward additional policy changes due to increasing uncertainty in the global economy.

Main Points:

• Assessing the impact after the January rate hike

• • In January 2025, the Bank of Japan raised its policy rate for the first time in about 17 years.
  • However, additional changes will likely not be made due to the need to carefully analyze the impact on the economy and the corporate financing environment.

• Uncertainty in the global economy is a factor

• • Instability in the external environment, such as the U.S. economic slowdown and China's economic downturn, could affect the Japanese economy.
  • Therefore, there is a growing consensus that a poorly executed rate hike should be avoided.

• Dealing with a weak yen and inflation is a challenge.

• • As the yen continues to weaken, upward pressure on prices also continues.
  • However, since there is no real increase in wages, excessive monetary tightening should be pursued with caution.

Conclusion:
The BOJ is likely to keep its policy rate unchanged for the time being, while carefully monitoring the impact on the economy after the January rate hike. However, there is still room to consider an additional rate hike depending on future price and wage trends.

Source: Bloomberg（March 7, 2025）