The Bank of Japan decided at its meeting that concluded this morning, Thursday, July 31, to keep monetary policy and interest rates unchanged. Members voted unanimously to maintain interest rates at 0.50%, as expected, for the fourth consecutive meeting, following a hike in the December meeting.
The Bank of Japan’s quarterly forecasts report, issued every three months, showed the bank raising its growth and inflation forecasts after lowering them in its April report, due to increased uncertainty surrounding global markets due to tariffs. Today’s positivity came after the trade agreement with Washington last week. The bank raised its growth forecast to 0.6% this year, compared to 0.5% in its April forecast, and to 0.9% next year, compared to 0.7% in its April forecast, and to 1% in 2027, compared to 0.9%. Meanwhile, the bank lowered its core inflation forecast, excluding food prices, for this year to 2.7%, compared to 2.2% in its April forecast, and to 1.8% in 2026, compared to 1.7% in its previous forecast.