The Bank of Japan on Thursday held its benchmark interest rate steady at 0.25%, its highest level since 2008, as widely expected.
The decision was made by an 8-1 vote, as board member Naoki Tamura pushed for a 25-basis-point increase, the bank said in a statement.
Despite the US making its third rate cut this year, the BoJ opted to wait and assess certain risks.
The bank stressed that Japan's economic outlook remains uncertain, with risks tied to global economic trends, commodity prices, and domestic wage and price behavior.
The bank emphasized it is closely monitoring financial and currency markets, as exchange rate shifts now have a greater impact on prices due to firms increasingly raising wages and prices.
"In particular, with firms' behavior shifting more toward raising wages and prices recently, exchange rate developments are, compared to the past, more likely to affect prices," it said.
Following the decision, the yen dropped 0.3% against the dollar, reaching a one-month low of 155 per dollar.
