BOJ To Keep Ultra-Low Interest Rates

The Bank of Japan (BOJ) is widely expected to maintain ultralow interest rates at a two-day policy meeting from Thursday, as uncertainty looms over prospects for inflation, wage growth and monetary tightening overseas, Kyodo News reported.

Photo Insert: The central bank is expected to retain its yield curve control program.

Prior to his second policy meeting since becoming governor in April, Kazuo Ueda pointed to upside risks to inflation due to recent changes in corporate price-setting behavior.

But he reiterated the need to persist with monetary easing because there is "some distance" to achieving its 2 percent inflation target in a stable manner, Mainichi Japan also reported.

The central bank is expected to retain its yield curve control program, under which short-term interest rates are set at minus 0.1 percent while 10-year government bond yields are guided to around zero percent.

Wage negotiations this year between labor unions and management have seen the biggest hikes in about three decades, boding well for the BOJ's efforts to achieve price stability accompanied by rising wages.

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