BOJ holds policy rate at 0.5%, cuts outlook
The Policy Board decided unanimously to encourage the uncollateralized overnight call rate to remain at around 0.5%. 12
The Outlook Report projects core CPI inflation in the low-2% range for fiscal 2025, the upper-1% range for fiscal 2026 and about 2% for fiscal 2027. 12
Compared with the previous report, growth forecasts for fiscal 2025 and 2026 were revised down owing to the effects of trade policies; price forecasts for the same years were also revised down, reflecting lower crude oil prices and slower growth. 12
Uncertainty over trade policies and their effects is described as extremely high, and risks to both the economic and price outlooks for fiscal 2025 and 2026 are skewed to the downside. 12
The Governor said that, if the outlook is realized, the Bank would continue raising the policy rate as economic and price conditions improve, given that real interest rates are extremely low. 1