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BOJ Holds Rates as Three Members Push for Hike

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The Bank of Japan kept interest rates unchanged but faced dissent from three board members who called for a hike, highlighting concern over inflation risks linked to the Middle East conflict.

The central bank held its short-term policy rate at 0.75% at the end of a two-day meeting. Board members Hajime Takata, Naoki Tamura and Junko Nakagawa proposed raising rates to 1%.

Governor Kazuo Ueda said policymakers need more time to assess how the Middle East situation will affect prices and the economy.

He said Japan's economy is recovering moderately, though with some weakness, and expects growth to slow in 2026. Ueda also flagged the risk of inflation overshooting, which could weigh on economic activity.

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