The Bank of Japan (BOJ) decided Friday to hold its benchmark interest rate steady at 1.0 percent, while lowering its inflation outlook for the current fiscal year.
Following a two-day board meeting, the BOJ decided by an 8-1 vote to maintain its uncollateralized overnight call rate at 1.0 percent, with one board member voting to raise the short-term policy target to 1.25 percent.
The central bank stressed anew its readiness to continue pushing up borrowing costs to forestall mounting inflation risks.
Since its historic exit from negative interest rates in March 2024, the BOJ has raised rates a total of five times. In June, the bank raised its short-term policy rate to 1 percent from 0.75 percent, taking its policy rate to the highest level since 1995.
The BOJ on Friday also released its quarterly report on economic and price developments.
The central bank said it expects the Japanese economy to grow 0.6 percent in the current fiscal year ending March 2027, compared with its earlier estimate of a 0.5 percent expansion.
For fiscal 2026, the BOJ revised its inflation forecast downward and expects core inflation to reach 2.5 percent, against the 2.8 percent forecast in April. For fiscal 2027, the bank revised its inflation outlook slightly upward to 2.4 percent from the previous 2.3 percent, while the forecast for fiscal 2028 remained the same at 2.0 percent.
The BOJ's long-term goal is to sustainably achieve 2 percent inflation.
Bank of Japan leaves rates unchanged, lowers fiscal 2026 inflation outlook
