Japan Central Bank Leaves Interest Rate Unchanged
By wchung | 14 Jun, 2026

Japan’s central bank kept its key interest rate unchanged and held off on new easing steps Wednesday, saying the economy is improving.

The Bank of Japan’s policy board voted unanimously to keep its overnight call rate at a super-low 0.1 percent. The bank has not tweaked that rate since December 2008.

The central bank described the economy as “picking up” due to expanding overseas demand and stimulus steps. It expects moderate growth for the time being and the expansion to accelerate once the corporate recovery spills over to households.

It acknowledged, however, that momentum is still too weak to drive a self-sustaining recovery in consumer demand at home.

The decision was widely expected after a key central bank report last week confirmed improving corporate morale. The quarterly “tankan” survey of business sentiment showed confidence rose for the fourth straight quarter amid growing faith in the global recovery.

The data affirmed the Bank of Japan’s relatively upbeat view of Japan’s economy, giving justification to stay put after loosening policy last month. Board members decided in March to boost liquidity by expanding a low-interest loan program amid political pressure to escalate the fight against deflation.

The central bank says it does not tolerate deflation though it expects prices to head south for the next couple of years. Deflation can hamstring economic growth by depressing company profits, sparking wage cuts and causing consumers to postpone purchases. It may also increase debt burdens.

Board members pledged to maintain an “extremely accomodative financial environment.”

“The bank recognizes that it is a critical challenge for Japan’s economy to overcome deflation and return to a sustainable growth path with price stability,” the bank said in a statement. “To this end, the bank will continue to consistently make contributions as a central bank.”

The meeting was the first for new board member Ryuzo Miyao, a former economics professor who joined the central bank in late March. Comments at his first press conference suggested that he would support additional easing steps.

Yoshihisa Morimoto, a power company executive, will fill the Bank of Japan’s final vacancy on July 1.

TOMOKO A. HOSAKA, Associated Press Writer TOKYO