BOJ maintains policy rate at 0.75% amid Middle East uncertainty

The Bank of Japan maintained its policy rate at 0.75% on March 19 amid growing Middle East uncertainty. The decision was widely expected by markets and central bank watchers.

The Bank of Japan (BOJ) on March 19, 2026, decided to keep its policy rate unchanged at 0.75%. This widely anticipated move reflects caution amid escalating Middle East tensions, which pose risks to oil prices, the Japanese economy, wages, and inflation. BOJ Governor Kazuo Ueda's board made no changes, aligning with market expectations during this period of global policy uncertainty.

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Bank of Korea holds key rate at 2.5% for seventh straight meeting amid Middle East war

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South Korea's Bank of Korea unanimously kept its benchmark interest rate unchanged at 2.5 percent on April 10, marking the seventh consecutive hold since July 2025 amid high uncertainty from the Middle East war, which has fueled inflation risks, growth slowdowns, and won weakness. Governor Rhee Chang-yong noted the won could strengthen quickly if tensions ease. The next policy meeting is May 28.

The Bank of Japan on April 28 kept its benchmark interest rate at 0.75% for the second consecutive meeting, as the war in Iran closed the Strait of Hormuz and spiked oil prices. The policy board voted 6-3, signaling potential hawkishness ahead.

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Bank of Korea Deputy Governor Yoo Sang-dai stated that uncertainty over the US Federal Reserve's rate path has deepened following the latest FOMC decision to hold benchmark rates at 3.5-3.75% for a second consecutive meeting, amid persistent Middle East instability. The BOK will monitor risks closely and act if needed to stabilize markets.

U.S. and Israeli forces attacked Iran over the weekend in a massive assault that killed Ayatollah Ali Khamenei, the nation's supreme leader for nearly four decades. This triggered retaliatory strikes in the Middle East, prompting Japanese police to bolster security at U.S. and Israel-related facilities. Stock markets in Tokyo opened lower, and Bank of Japan Deputy Governor Ryozo Himino stressed the need to monitor the situation.

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The Japanese government expects its interest payments on outstanding debt to roughly double over the next four years due to the Bank of Japan's gradual rate hikes. Payments are projected at ¥21.6 trillion ($139 billion) in the year starting April 2029, up from the current year's budgeted ¥10.5 trillion.

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