The Bank of Japan kept its policy rate steady at 0.5% on Friday, in line with the forecast from a Reuters poll of economists. <\/p>\n
The decision to stand pat comes as Japan’s core inflation rate fell to its lowest since November 2024, coming in at 2.7% for August and marking a third straight month of decline.<\/p>\n
Japan’s core inflation figure \u2014 which strips out prices of fresh food \u2014 was in line with the 2.7% expected by economists polled by Reuters.<\/p>\n
Headline inflation in the country also dropped to 2.7%, from 3.1% in July, marking a fresh low since November 2024.<\/p>\n
The so-called “core-core” inflation rate, which strips out prices of both fresh food and energy and is closely monitored by the Bank of Japan, was at 3.3%, down from 3.4% in July.<\/p>\n
Rice inflation, which has contributed to a cost-of-living crisis in the country, \u00a0softened significantly to 69.7%, down from July’s 90.7%, but remains at historic highs.<\/p>\n
A worker restocks riceballs at a 7-Eleven convenience store, operated by Seven & i Holdings Co., in Tokyo, Japan.<\/p>\n
Bloomberg | Bloomberg | Getty Images<\/p>\n
The BOJ noted in its statement that inflation expectations have risen “moderately”, with the core inflation in the range of 2.5%-3% due to the effects of food price rises.<\/p>\n
However, the central bank said that the effects of rising food costs, especially in rice prices, are expected to wane.<\/p>\n