Event: The Bank of Japan

The Bank of Japan held rates steady on Tuesday and continued to maintain a wait-and-see approach as it gauges the economic effects of the war in the Middle East. Its policy board voted to sit tight at a two-day meeting that concluded on the same day, maintaining the policy rate — the uncollateralized overnight call rate — at 0.75%.  Investors and analysts were more confident earlier this month of a rate increase at the April meeting.Expectations cooled over the past few weeks, however, in part due to the absence of clear signals from BOJ officials. Data from Totan ICAP showed the market was pricing in just a 3% chance of an April rate increase as of Monday afternoon, down from about 60% two weeks ago.  BOJ Gov. Kazuo Ueda is scheduled to attend a news conference later Tuesday, and the market will be seeking some hints from his comments that might indicate the timing of the next rate increase. In March 2024, the bank started increasing rates and ended its negative rate policy. Since then, it has been slowly tightening monetary policy.Its last move was in December 2025, when it took the key rate from 0.5% to 0.75%.  As the bank holds on rates, the yen remains weak. It has been trading at about ¥159 to the dollar over the past month.Further weakening could put pressure on the central bank to raise rates, especially if inflation increases as a result of the exchange rate.