BOJ Holds Rate, Slows Bond Reduction

The Bank of Japan kept its policy rate unchanged at 0.5% and announced it would slow the reduction of its Japanese government bond purchases beginning in April 2026, signaling a cautious approach to policy normalization. The BOJ's decision had limited immediate impact on the yen and JGB markets, while analysts note it leaves the door open for future rate hikes. China's yuan remained steady against the U.S. dollar following the BOJ decision, with market attention turning to the U.S. Federal Reserve's upcoming policy announcement. The Fed is expected to keep rates unchanged, but investors are watching closely for indications of future policy shifts. U.S. Treasury yields held steady as expectations for Fed rate cuts this year have diminished amid strong economic data and persistent inflation. Globally, investor sentiment remains sensitive to central bank signals and ongoing geopolitical risks.