Bank of Japan Holds Steady: Takaichi Calls for Caution, Iran Conflict May Increase Inflation Pressure

Gate News reports that on March 19, the Bank of Japan announced it would keep its benchmark interest rate unchanged at 0.75%, in line with market expectations, but also warned that the Iran conflict could lead to new inflationary pressures by pushing up energy prices. The decision was approved by an 8:1 vote, indicating some internal disagreement within policy circles.

In its statement, the Bank of Japan noted that inflation may temporarily fall below 2% in the short term, but escalating tensions in the Middle East combined with rising crude oil prices could have a sustained upward impact on prices. Japan relies heavily on Middle Eastern energy imports, with about 95% of its crude oil coming from the region, making it particularly sensitive to geopolitical risks. To ease pressure, the Japanese government has released strategic oil reserves and pledged to stabilize domestic gasoline prices.

Meanwhile, markets are closely watching the progress of Japan’s “Shunto” wage negotiations. Several large companies have agreed to wage increases of over 5%, which, if implemented, could support consumption and inflation. Data shows Japan’s January inflation rate at 1.5%, the first time in nearly 45 months to fall below the 2% target, but actual wages are showing signs of recovery.

Analysts believe that wage growth and inflation trends will be key variables in whether the Bank of Japan raises interest rates in April or June. However, Prime Minister Sanae Suga remains cautious about further tightening policies, adding uncertainty to future monetary policy paths.

On a macro level, Japan’s interest rate policies are closely linked to the global liquidity environment, and changes could indirectly impact the performance of risk assets including Bitcoin and Ethereum. (CNBC)