At the Bank of Japan's meetings on 17 and 18 September, discussions advanced on adjusting monetary policy as underlying inflation approached 2%. Although weakness in domestic demand was noted, the view was expressed that the outlook for prices and growth would generally remain within the current framework.
At the Bank of Japan's September meetings, the view was expressed that the economy was recovering moderately despite being affected by the situation in the Middle East. Underlying consumer price inflation was approaching the 2% target, and the view was expressed that conditions were in place to consider an interest-rate change in the near future while maintaining accommodative financial conditions.
Real GDP growth in the April–June quarter was positive, but domestic demand was tilted toward contraction. Some participants also expressed the view that the positive contribution from external demand merely reflected the impact of lower imports resulting from supply constraints caused by the situation in the Middle East. It was pointed out that this could not be described as strong growth.
Concerns about an economic slowdown receded against a backdrop including expanding global AI demand, while upward pressure on prices continued to build. The inflation outlook needs to be reviewed, and a major shift in financial conditions was indicated.