The Bank of Japan decided at its meeting that concluded this morning, Tuesday, June 17, to keep monetary policy and interest rates unchanged. Members voted unanimously to maintain interest rates at 0.50%, as expected, for the third consecutive meeting. They also decided to slow the pace of bond purchases starting in April of next year.
The bank decided to reduce its purchases of Japanese government bonds (JGBs). After voting by 8 to 1, the bank approved a plan to reduce monthly direct purchases of JGBs to approximately 2 trillion yen from January to March 2027. The amount will be reduced initially by approximately 400 billion yen per quarter until March 2026, and by 200 billion yen per quarter from April to June 2026. The bank explained that this step is to support market stability and improve the performance of the government bond market. On the price front, the annual increase in the consumer price index (CPI), excluding processed foods, recently averaged approximately 3.5%, with the trend of wage increases being passed on to selling prices continuing