Bank of Japan holds rates steady, warns of war effects

The Bank of Japan kept interest rates steady yesterday but warned of the impact rising oil costs from the Middle East conflict could have on underlying inflation, signalling its caution over mounting price pressures.

- LEIKA KIHARA MAKIKO YAMAZAKI

Two hawkish members of the board also dissented to the central bank's projection on how soon inflation could durably hit its target, arguing that the timing could be quicker than initially expected.

The BoJ’s decision came in a week crammed with central bank meetings, where policymakers grappled with a policy path muddled by the Middle East oil shock. The Federal Reserve and Bank of Canada kept rates on hold but struck hawkish tones on Wednesday, mindful of the risk that surging oil prices could fan inflation.