The Bank of Japan kept its rates steady at 0.75% as expected, but noted that inflation risks now are tilted to the upside due to the Iran war.
In its statement, the BOJ said that the decision was split, with eight members of the nine-member board voting in favor of a hold.
In its statement, the BOJ said that while inflation is expected to temporarily decelerate below 2% in the near term, the conflict in the Middle East will exert “upward pressure, affected by the recent rise in crude oil prices.”
The decision comes as Tokyo grapples with the fallout from the Iran conflict, which has pushed up energy prices. The country gets about 95% of its energy imports from the Middle East.
Japan has released crude stockpiles, while Prime Minister Sanae Takaichi pledged to keep retail gasoline prices “in check” at a nationwide average of about 170 yen per liter.
