The Bank of Japan decided at its meeting, which concluded this morning, Friday, September 19, to keep monetary policy and interest rates unchanged. The board voted 7-2 to maintain interest rates at 0.50%, as expected, while two members voted to raise interest rates by 25 basis points and set guidelines for money market operations.
Regarding the ETFs and Japanese Real Estate Investment Trusts (J-REITs), the bank unanimously decided to sell and dispose of the assets.
The monetary policy report showed that the Japanese economy has recovered moderately, despite some weaknesses.
At the bank’s press conference, Bank of Japan Governor Kazuo Ueda indicated that the latest consumer price figures were within expectations, and that food price inflation is expected to dissipate, with the risk that prolonged increases in food prices could affect inflation expectations and gradually raise core inflation.
The Bank expects a moderate impact from US tariffs, and while they will impact manufacturers’ profits, they have not yet affected the Japanese economy as a whole. The Bank expects core inflation to continue heading toward 2%.
Real interest rates are very low, and if our economic and price forecasts are met, the Bank will continue to raise interest rates in line with economic and price improvements.