BOJ Holds Rates Steady, U.S.-Japan Tra

Akira Ito
17 Jun, 2025
Tokyo

Japan's stock market indexes advanced, and the Bank of Japan held rates as widely anticipated. 

The Nikkei 225 Stock Average added 0.4%, and the broader Topix edged up 0.2%, tracking gains in overnight trading in New York. 

Market sentiment was cautious after Japan's prime minister, Shigeru Ishiba, confirmed that differences remained with the U.S. over tariffs. 

Japan's negotiators are now looking for a "package" deal that could pave the way for an agreement, but an additional tariff of 25% remains a sticky point. 

Both sides agreed to extend discussions after talks on the sidelines of the G-7 meeting failed to produce an agreement. 

 

Bank of Japan Held Rates Steady

The Bank of Japan held its overnight call rate at 0.5% at the end of its two-day meeting on Tuesday.

In a unanimous decision, the policy committee decided to leave rates unchanged, citing elevated geopolitical tensions and lingering uncertainty rooted in the U.S. trade policy. 

Short-term interest rates remained at the highest level since 2008 and signaled its plans to adjust purchases of government bonds starting next April. 

The Bank of Japan has been trimming its purchase of Japanese government bonds by 400 billion yen (or $2.8 billion) a quarter, but now the central bank plans to trim purchases by 200 billion yen.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average added 0.4% to 38,480.73, and the broader Topix gained 0.2% to 2,782.80. 

In the year so far, the Nikkei 225 Stock Average is still down about 2%, but the broader Topix has risen above the flatline and advanced 1%. 

Nippon Steel declined 3.3% to ¥2,777.0, and the company is scheduled to finalize its agreement to acquire U.S. Steel for about $14.9 billion. 

After the purchase, Nippon Steel will be the largest steel company in the world, allowing it to increase its global competitiveness amid stiff price competition from Chinese steelmakers. 

Nippon Steel and U.S. Steel are expected to finalize their "partnership" by June 18. 

Shipping companies were in focus amid escalating tensions in the Middle East, and Iran threatened to close the Strait of Hormuz. 

Nippon Yusen KK decreased 0.5% to ¥5,123.0, Kawasaki Kisen Kaisha Ltd. fell 1.4% to ¥2,057.50, and Mitsui O.S.K. Lines declined 1.3% to ¥4,927.0.