The Bank of Japan kept its interest rates steady on Tuesday and said it would slow the pace of reduction in its bond purchases next year, signalling a cautious approach to unwinding its decade-long monetary stimulus.

The Bank of Japan unveiled a plan to step back from the bond market at a slower pace from next year to ensure market stability while sticking to a path of normalization that includes the possibility of more rate hikes.

The Bank of Japan ((BoJ)) kept its key short-term interest rate unchanged at 0.5% during its June 2025 meeting, maintaining the highest level since 2008 and aligning with market expectations. The interest rate decision was widely anticipated by economists and market participants,