Home›Forex›Central Banks›BoJ keeps policy rate at 1.00%, hawkish dissent highli…

BoJ keeps policy rate at 1.00%, hawkish dissent highlights inflation risk

In its Outlook Report, the BoJ raised median GDP forecasts for fiscal 2026 and 2027, while adjusting core CPI to 2.5% for fiscal 2026 and 2.4% for fiscal 2027.

Reported · Written up by our desk · Central Banks

The Bank of Japan left its policy rate unchanged at 1.00%, while delivering a policy package that reinforced its gradual normalization message, according to Action Forex.

The decision was approved by an 8-1 vote, with Takata Hajime dissenting and arguing for an immediate 25 basis point hike to 1.25%, citing upside inflation risks tied to overseas demand shocks and shifts in global financial conditions.

Action Forex reports the BoJ modestly raised its median GDP forecasts for fiscal 2026 and 2027, but lowered its fiscal 2026 core CPI projection to 2.5% from 2.8% as it expects the effect of higher crude oil prices to fade over time.

The updated Outlook Report also lifted the fiscal 2027 inflation forecast to 2.4% from 2.3%, and projected CPI inflation is likely to accelerate to clearly above 2% in the second half of fiscal 2026 before easing toward target, with the bank warning risks are skewed to the upside and that it will continue raising the policy interest rate while assessing economic activity, prices, and financial conditions.

Latest closeWTI crude $86.80 ▲3.8%

More like this

Sources