BoJ left its uncollateralized overnight call rate unchanged at around 0.25% during today’s meeting, as widely anticipated and decided by unanimously.
In the accompanying statement, BoJ maintained a positive outlook for the Japanese economy, projecting continued growth at a rate above its potential. The central bank expects “overseas economies will continue to grow moderately,” further supporting Japan’s economic expansion. Domestically, the “virtuous cycle from income to spending” will gradually intensify, aided by accommodating financial conditions.
On the inflation front, core CPI is forecast to rise through fiscal 2025. BoJ also noted that underlying inflation will “increase gradually” as output gap narrows and medium- to long-term inflation expectations firm up.
However, the central bank also outlined several risks to its outlook, including global economic developments, commodity prices, and the pace at which firms adjust wage and price setting.
