Bank Of Japan Leaves Interest Rate At 0.25%, Diverging From Fed's 50 Basis Point Cut

BY Benzinga | ECONOMIC | 09/19/24 11:33 PM EDT

In a move closely watched by global markets, the Bank of Japan decided on Friday to maintain its benchmark interest rate at around 0.25%.

What Happened: The decision aligns with predictions from a Reuters poll, where economists anticipated another rate hike by the end of the year.

Following the announcement, the yen remained nearly unchanged at 142.52 against the dollar. The Nikkei 225 index, which had risen by 2%, maintained its level, according to data from Benzinga Pro.

See Also: Elon Musk Says Warren Buffett Is Positioning For Kamala Harris Win With His $277B Cash Pile As Pro-Trumper John Paulson Warns Of Equity Market Exit

Why It Matters: Last month, BOJ Governor Kazuo Ueda indicated that the central bank would continue to raise interest rates if the economy and inflation met projections.

This stance contrasts with other global central banks, such as the U.S. Federal Reserve, which recently cut interest rates by 50 basis points.

The BOJ had previously maintained near-zero interest rates to stimulate inflation and economic growth. However, it raised the key rates to 0.25% in July, aiming to achieve a 2% inflation target.

Read Next:

  • Traders Brace For Friday Volatility As Over $5 Trillion In Options Expire: Could ‘Triple Witching’ Spoil Fed’s Rally?

Image Via Shutterstock

This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article