Bank of Japan Holds Interest Rate at 0.5%

The Bank of Japan announced it will slow the pace of reducing its purchases of government bonds starting in April 2026, keeping its key interest rate at 0.5%, amid growing risks to economic growth.

The bank’s decision, in line with economists’ expectations, reiterated its commitment to reduce monthly purchases of Japanese government bonds by 400 billion yen (about $2.76 billion) each quarter, reaching 3 trillion yen per month by March 2026, according to a plan announced last year, according to Reuters.

After that date, the bank will begin to ease the pace of reduction, reducing purchases by 200 billion yen each quarter between April 2026 and March 2027, bringing the monthly rate to around 2 trillion yen.