The Bank of Japan (BoJ) has reaffirmed its commitment to monetary easing and remained silent on its outlook for the next year, amid growing inflation and expectations of policy changes.

The BoJ’s decision, announced today after a two-day meeting, sent the yen lower against the dollar and lifted the stock market. The bank said it would continue to keep its short-term interest rate at -0.1% and its target for the 10-year government bond yield at around 0%.

The bank also said it would “patiently” pursue monetary easing, given the “extremely high uncertainties” in the domestic and global economies and financial markets.

The BoJ’s stance contrasts with that of most other major central banks, which have been raising interest rates for over a year to contain inflation. The BoJ has been reluctant to tighten its policy, as it aims to boost the world’s third-largest economy, which has been struggling with low growth and deflation for decades.

However, the BoJ has faced increasing pressure to adjust its policy, as inflation has picked up in recent months, driven by higher energy and food prices. In November, the core consumer price index, which excludes fresh food, rose 1.1% year-on-year, the highest level since 2015.

The BoJ’s governor, Kazuo Ueda, acknowledged this month that managing monetary policy would “become even more challenging” in the coming year, fueling speculation that the bank would make some tweaks to its policy framework, such as raising its yield target or reducing its bond purchases.

Some analysts have also predicted that the BoJ would follow the footsteps of the US Federal Reserve, which last week kept its interest rate at a 22-year high but signaled three rate cuts in 2024, amid signs of slowing growth and easing inflation.

Katsutoshi Inadome, senior strategist at SuMi TRUST, said in a note before the BoJ’s decision that he expected the bank to change its policy next year, and possibly raise its interest rate in 2024, after seeing clearer evidence of wage growth, which is crucial for achieving its 2% inflation target.

He also said that the BoJ would prefer to start its policy normalization before the Fed, to avoid the risk of a sharp appreciation of the yen, which would hurt Japan’s exports and growth.

However, the BoJ gave no indication of such plans in its statement today, and instead reiterated its readiness to take additional easing measures if needed. The bank also said it would conduct a “comprehensive assessment” of the effects and side effects of its policy in April 2024, as part of its regular review.