The Bank of Japan headquarters in Tokyo. Expectations of a rate increase cooled over the past few weeks in part due to the absence of clear signals from BOJ officials. | REUTERS

The Bank of Japan held rates steady on Tuesday and continued to maintain a wait-and-see approach as it gauges the economic effects of the war in the Middle East.

Its policy board voted to sit tight at a two-day meeting that concluded on the same day, maintaining the policy rate — the uncollateralized overnight call rate — at 0.75%.

Skipping a rate increase was a dovish move on the surface, analysts said, but three members opposing the pause and advocating for an immediate increase in borrowing costs signals the possibility of a hawkish path going forward.

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