At its 30th monetary policy meeting, the Bank of Japan left the policy rate unchanged at 1.25% and stated that underlying inflation had reached a level broadly consistent with the 2% target. Attention is focused on the Bank's outlook and the minutes, while Board Member Takata opposed keeping rates unchanged.
At its 30th monetary policy meeting, the Bank of Japan decided to leave its target for the uncollateralized overnight call rate unchanged at 1.25%. The decision was approved by a majority of the 9 Policy Board members, indicating that the Bank intends to assess the effects of the rate hike in September. Governor Ueda is scheduled to explain the decision at a press conference in the afternoon.
The Bank of Japan judged that underlying inflation, excluding temporary fluctuations, was broadly consistent with the 2% target. Achievement of the 2% price stability target introduced in 2013 is expected to come 13 years later, and the Outlook for Economic Activity and Prices reached its assessment by combining several indicators.
The Outlook report forecasts median year-on-year CPI inflation excluding fresh food at 2.6% in FY2027. It projects that higher crude oil prices from FY2026 onward will push up consumer prices. Growth is expected to be 0.7% in FY2027 and 0.7% in FY2026, with expanding AI demand expected to boost corporate earnings.
Board Member Takata Hajime (高田 創) judged that the Bank had entered a phase in which it should accelerate the pace of rate hikes, as underlying inflation had reached the 2% target, and opposed the proposal to leave the policy rate unchanged. The decision to leave rates unchanged was made by majority vote.