BoJ kept its uncollateralized overnight call rate steady at approximately 0.25% in a unanimous decision, aligning with market expectations. The central bank indicated that if the outlook for economic activity and prices materializes as anticipated, it will “accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation.” This signals readiness to tighten monetary policy further, contingent on economic developments.
Nevertheless, BoJ emphasized the necessity of paying close attention to the “future course of overseas economies,” particularly the US, along with developments in financial and capital markets due to their impact on Japan’s economic activity and price outlook.
In its latest economic projections, the BoJ made the following adjustments:
Real GDP Growth:
- Fiscal 2024: Unchanged at 0.6%.
- Fiscal 2025: Revised upward from 1.0% to 1.1%.
- Fiscal 2026: Unchanged at 1.0%.
CPI Core (excluding fresh food):
- Fiscal 2024: Unchanged at 2.5%.
- Fiscal 2025: Revised downward from 2.1% to 1.9%.
- Fiscal 2026: Unchanged at 1.9%.
CPI Core-Core (excluding fresh food and energy):
- Fiscal 2024: Increased from 1.9% to 2.0%.
- Fiscal 2025: Unchanged at 1.9%.
- Fiscal 2026: Unchanged at 2.1%.
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