Japan's central bank holds its key rate steady amid worries about the Iran war and energy prices

TOKYO (AP) — The Bank of Japan decided Tuesday to keep its benchmark rate unchanged at 0.75% amid growing worries about the war in Iran pushing prices of oil and other products higher.

The decision from Japan’s central bank was expected, though the 6-3 vote by its monetary policy board members was not unanimous. They face pressure to gradually raise rates after years of keeping the benchmark interest rate near or below zero to counter deflationary pressures.

The Bank of Japan said that while the economy was still growing moderately it was expected to slow.

“There are various risks to the outlook,” it said in a statement. “For the time being it is necessary to pay particular attention to the impact of the future course of the situation in the Middle East.”

The Strait of Hormuz is effectively closed due to the war. With few ships able to cross the strait, through which about 20% of all traded oil and natural gas passes, oil and gasoline prices are skyrocketing and jet fuel, cooking gas and other energy products are starting to become scarce in parts of the world.

Japan depends heavily on oil from the Middle East to power its economy.

The U.S. Federal Reserve and central banks in Europe are also meeting on interest rates this week.

Tokyo's benchmark Nikkei 225 share index dipped more than 1% after the BOJ’s decision.

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