Bank of Japan keeps its main interest rate unchanged, but announces further hikes

(AFP) The Bank of Japan kept its main interest rate unchanged Thursday, while raising its forecasts for economic growth and inflation.

By keeping its main interest rate at 0.5%, the BOJ advanced that it expects growth of 0.6% this year, up from 0.5% previously forecast.

It also anticipated that inflation, excluding fresh food, will rise 2.8% from 2.3 previously forecast.

The institution said in a statement that growth "could moderate because trade and other policies in each jurisdiction lead to a slowdown in foreign economies and a decline in local corporate profits."

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But he added that "factors such as financial conditions accommodative conditions are expected to provide support."

"Subsequently, the Japanese economic growth rate may rise with the return of external economies to a moderate growth trajectory," it said.

The bank hailed "positive developments" in global trade, such as Donald Trump's recent agreement with Japan.

However, he warned that "high uncertainties persist," and that "trade policies announced so far could put downward pressure on the local and external economies."