Description
Japan's benchmark interest rate is set and announced by the Bank of Japan (BOJ), primarily using the uncollateralized overnight call rate as the key tool. When the economy overheats or inflation pressures rise, the BOJ typically increases the rate to curb demand; conversely, when the economy slows or inflation is too low, it lowers the rate to stimulate growth. The BOJ aims to stabilize inflation at 2%.
The BoJ holds eight interest rate decision meetings annually. The decisions are made by majority vote among the nine members of the Policy Board, which includes the governor, two deputy governors, and six other members.