BOJ Unlikely to Change Rates at Meeting from Thurs.

Tokyo, Sept. 13 (Jiji Press)--The Bank of Japan is widely expected to keep its short-term interest rate target at around 0.25 pct at its two-day policymaking meeting from Thursday as it is putting more of its focus on assessing the impact of recent financial market turbulence for the time being.

The central bank's decision at its previous policy meeting in late July to raise the rate from the range of around zero to 0.1 pct caused stock and currency markets to fluctuate wildly. The country's benchmark Nikkei 225 stock average logged its steepest-ever point drop while the yen shot up against the dollar, also reflecting investor worries over the U.S. economy.

At the July meeting, the BOJ also decided to reduce its purchases of long-term Japanese government bonds by about 400 billion yen every quarter so that its monthly buying will fall from around 6 trillion yen to around 3 trillion yen by January-March 2026.

Following the market turmoil, BOJ Deputy Governor Shinichi Uchida in early August indicated that further rate hikes would be put on hold for the time being, saying the bank "will not raise its policy interest rate when financial and capital markets are unstable."

The BOJ apparently determined that the need to rush rate hikes has subsided as inflationary pressure receded thanks to the yen rebounding from extraordinarily low levels.

[Copyright The Jiji Press, Ltd.]