The Bank of Japan stuck with the world’s last negative interest rate Tuesday and offered no guidance on if it might scrap the policy next year.
The central bank kept its short-term rate at -0.1% and maintained its yield curve control parameters at the end of a two-day gathering, according to a statement. Forward guidance on policy was left unchanged with no specific references hinting at the prospects for a rate increase.
Governor Kazuo Ueda chose not to surprise the markets as he continues to seek more evidence to confirm that wage gains will feed into sustainable inflation. Still, the decision to stand pat in December won’t quell speculation that a rate hike is coming sooner or later, with April seen as the most likely option.
Investors will parse Ueda’s words closely when he addresses the press later Tuesday for any hints that build the case for that timing or for an earlier move.
