Tokyo: The Central Bank of Japan decided on Tuesday to keep its policy rate unchanged, while downgrading its assessment of the country’s economy, according to a statement released by the bank.

According to Kuwait News Agency, at a two-day policy meeting, Bank of Japan’s (BOJ) Governor Kazuo Ueda and his eight board colleagues agreed to maintain the benchmark short-term rate steady at around 0.5 percent, holding the policy the BOJ made in January. The decision comes amid growing economic uncertainties, particularly in light of trade policies affecting global markets.

The BOJ announced a revised timeline for the reduction of its monthly purchases of Japanese government bonds. The central bank plans to slow the pace of reductions from April 2026, in response to uncertainties over US President Donald Trump’s administration’s high tariffs. Under the newly outlined strategy, the central bank will continue reducing purchases by about JPY 400 billion (USD 2.8 billion) every quarter until March 2026, before easing the cuts to JPY 200 billion (USD 1.4 billion) every quarter from April next year.

The BOJ’s statement highlighted concerns about Japan’s economic growth, stating that it is “likely to moderate” due to the impact of trade and other policies on overseas economies, which could lead to a decline in domestic corporate profits. However, the bank expects factors such as accommodative financial conditions to offer some support to the economy. Additionally, the BOJ anticipates that Japan’s economic growth rate will eventually rise as overseas economies return to a moderate growth path.

In its outlook, the central bank emphasized potential risks, noting the significant uncertainty surrounding the evolution of trade and other policies across jurisdictions and their impact on overseas economic activity and prices.