TOKYO: The Bank of Japan is likely to hold interest rates steady at a two-day policy meeting starting Wednesday.

Many BOJ policymakers believe that the central bank needs to keep a close watch on a possible impact on the domestic economy from political developments in Japan and the United States before making any change to its monetary policy, people familiar with their thinking said.

BOJ policymakers are believed to maintain their view that underlying inflation is moving in line with the central bank’s expectations that it will meet the BOJ’s 2 pct target in fiscal 2026.

The BOJ has ample time to make a decision on whether to raise interest rates, Governor Kazuo Ueda said at a press conference in Washington Thursday after a meeting of finance ministers and central bank chiefs from the Group of 20 major economies.

BOJ policymakers voted to raise their policy interest rate to around 0.25 pct at a meeting in July.

Next week’s meeting comes as the yen has faced renewed downward pressure against the dollar ahead of the U.S. presidential election in November, fueling concerns about price increases for imported items.

JIJI Press