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2025-07-31 16:15:23
[Bank of Japan Holds Strategy but Raises Inflation Forecast] ⑴ The Bank of Japan (BOJ) maintained its benchmark interest rate at 0.5%, a decision unanimously adopted by its policy board. The bank previously raised its interest rate to its current level from 0.25% in January. ⑵ In its quarterly economic outlook, the central bank raised its inflation forecast for fiscal 2025 from 2.2% to 2.7%, primarily due to rising food prices. The forecast for fiscal 2026 was slightly adjusted from 1.7% to 1.8%, and for fiscal 2027 from 1.9% to 2.0%. ⑶ The economic growth forecast for fiscal 2025 was raised from 0.5% to 0.6%, with forecasts for fiscal 2026 and 2027 remaining unchanged at 0.7% and 1.0%, respectively. ⑷ The central bank cited the Japan-US trade agreement as positive development, with the US agreeing to reduce tariffs on Japanese goods from 25% to 15%, as well as tariffs on automobiles and auto parts, in exchange for a $550 billion investment from Japan in the US. ⑸ However, the central bank warned that trade policy negotiations and their impact remain highly uncertain.
