As expected, the Bank of Japan held its short-term interest rate steady at 0.5% at its meeting on Thursday, confirming its cautious optimism about the future of the domestic economy, amid a decline in some external risks following a trade agreement with the United States .
The bank raised its inflation forecast for the current fiscal year to 2.7% , compared to its previous forecast of 2.2%, indicating its growing confidence in achieving its stable inflation target.
The bank said in its statement that "the factors affecting prices have become more balanced," hinting at a possible move towards a tighter monetary policy in the future, but at the same time it stressed the continued uncertainty surrounding the global economy, especially as a result of trade negotiations and foreign policies.
This decision came hours after the US Federal Reserve announced it was holding interest rates steady for the fifth time in a row, reflecting a more cautious global approach in light of international economic changes.
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