BOJ Likely to Maintain Monetary Policy at Next Meeting

Tokyo, Jan. 16 (Jiji Press)–The Bank of Japan is expected to keep its policy interest rate unchanged at its next two-day policy meeting starting Thursday. At the meeting, the Japanese central bank is expected to review market trends, such as the yen’s weakening and rises in long-term interest rates in Japan, after it raised the policy rate to 0.75 pct at its previous meeting last month. The BOJ will also release its quarterly Outlook for Economic Activity and Prices report at next week’s meeting. It will consider whether to raise its economic growth projection for fiscal 2026 from the 0.7 pct growth forecast in the last report released in October 2025, after Prime Minister Sanae Takaichi’s administration adopted an economic package in November last year. Additionally, the BOJ will discuss whether its inflation forecast needs to be revised in light of upward pressure on prices from wage hikes, companies’ efforts to reflect costs in prices, and the yen’s weakening, even as government measures put a damper on inflation. In the October 2025 report, the BOJ predicted that the country’s consumer price index, excluding fresh food prices, will rise 1.8 pct in fiscal 2026 from the previous year. The BOJ raised the policy rate in December 2025 for the first time since January that year, citing the increasing likelihood of Japan achieving its 2 pct inflation target by the second half of the forecast period through fiscal 2027. The central bank is expected to maintain its stance of adjusting the degree of monetary accommodation through further rate hikes if prices move in line with its projections. END [Copyright The Jiji Press, Ltd.]