() – The Bank of Japan kept interest rates steady on Thursday, as policymakers preferred to tread cautiously in pushing up borrowing costs amid uncertainty over U.S. president-elect Donald Trump’s economic plans.

As widely expected, the nine-member BOJ board decided to keep its short-term policy rate unchanged at 0.25%. But hawkish board member Naoki Tamura dissented and proposed raising interest rates to 0.5% on the view inflationary risks were building. His proposal was voted down.

QUOTES:

BEN BENNETT, ASIA-PACIFIC INVESTMENT STRATEGIST, LEGAL AND GENERAL INVESTMENT MANAGEMENT, HONG KONG

“The decision to keep rates on hold was widely expected by investors, so I don’t expect a big market reaction. That said, the hawkish Fed dot plot overnight gave the BOJ an option to increase rates, and there was one dissenting vote for a 25-bp hike, so it looks like rates will be going up early in 2025.”

MASAHIRO ICHIKAWA, CHIEF MARKET STRATEGIST, SUMITOMO MITSUI DS ASSET MANAGEMENT, TOKYO

“The decision was in line with market expectations, but futures pared losses, which indicated a relief among investors, as the decision came right after the unexpectedly hawkish view of the U.S. Federal Reserve’s rate path for next year.”