At its meeting that concluded this morning, Friday, July 31, the Bank of Japan decided to maintain its monetary policy and interest rates unchanged. Members voted 8-1 to keep interest rates at 1%, as expected, following a 25-basis-point increase in June. Member Hajime Takata favored raising the rate to 1.25%, citing the risk of rising inflation.

The Bank of Japan’s policy decision was not to change interest rates. The Bank of Japan’s quarterly economic outlook report showed the bank raising its growth and inflation forecasts. The bank increased its growth forecast for this year to 0.6%, up from 0.5% in its April forecast, and to 0.8% for next year, up from 0.7% in April. It also projects growth of 0.8% in 2028.

Conversely, the bank expects inflation to reach 2.5% this year, compared to 2.8% in its April forecast, and 2.4% next year. Core inflation, which excludes food prices, is expected to continue rising moderately, reaching 2.5% this year, compared to 2.6% in the April forecast, and remaining unchanged at 2.6% next year.