At its meeting that concluded Tuesday morning, April 28, the Bank of Japan decided to maintain its monetary policy and interest rates unchanged. Members voted 6-3 to keep the interest rate at 0.75%, as expected, while three members favored a 0.25-point increase due to tensions in the Middle East and rising inflation risks.

The Bank of Japan’s quarterly outlook report showed a downward revision of its growth forecast and an upward revision of its inflation forecast. The bank lowered its growth forecast for the fiscal year ending 2026 to 0.5%, down from 1% in its January forecast, and to 0.7% for next year, down from 0.8% in January. It maintained its 2028 forecast at 0.8%.

In contrast, the bank expects inflation to rise to 2.8% this year, compared to 1.9% in the January forecast, and to 2.3% in 2027, compared to 2% in the January estimate. Core inflation, excluding food prices, is expected to continue rising to 2.6% this year, compared to 2.2% in the January forecast, and to 2.6% in 2027, up from 2.1% in the January forecast.