Japan's central bank, the Bank of Japan, maintained its benchmark short-term policy rate at around 1.25% at its monetary policy meeting on October 30.

The Bank of Japan decided to freeze the interest rate with the majority approval of its policy board members at the monetary policy meeting held over a two-day period starting yesterday.

At last month's meeting, the Bank of Japan raised the benchmark interest rate by 0.25 percentage points from around 1.0% to around 1.25% due to concerns over rising inflation driven by higher oil prices, a weak yen, and growing demand related to artificial intelligence (AI).

This marked the highest level in 31 years since 1995.

Previously, market consensus largely expected the Bank of Japan to freeze interest rates this month.

At this meeting, the central bank's assessment of inflation drew more attention than whether it would raise interest rates.

During the meeting, the Bank of Japan officially stated that the underlying inflation rate, excluding temporary volatile factors, is "at a level generally consistent" with its 2% target.

This signifies that the deflation gripping the Japanese economy for over 30 years has ended, drawing attention to whether it signals an acceleration of further interest rate hikes.

Bank of Japan Governor Kazuo Ueda will hold a press conference this afternoon to explain the details of the interest rate decision.