Key Facts
• July 31, 2025: Bank of Japan (BOJ) decided to maintain current monetary policy.
• Additional rate hike was postponed; short-term interest rate target remains at 0.5%.
• This marks the fourth consecutive meeting without a rate hike since January 2025.
• U.S.-Japan tariff agreement reduced uncertainties but global economic impacts remain under review.
• Economic growth forecast for fiscal year 2025 revised to 0.6% (previously 0.5%).
• Inflation rate (excluding fresh food) for fiscal year 2025 adjusted to 2.7% (previously 2.2%).
• Inflation forecasts for fiscal years 2026 and 2027 revised to 1.8% and 2.0%, respectively.
• GDP growth for fiscal years 2026 and 2027 remains at 0.7% and 1.0%, respectively.
• BOJ released its quarterly “Outlook for Economic Activity and Prices” report.
Summary
The Bank of Japan (BOJ) decided on July 31, 2025, to maintain its current monetary policy, postponing additional rate hikes. The short-term interest rate target remains at 0.5%, marking the fourth consecutive meeting without a rate increase since January 2025. While the U.S.-Japan tariff agreement has reduced uncertainties, the BOJ continues to assess the global economic impact of tariff measures. Reflecting economic adjustments, the BOJ revised its fiscal year 2025 GDP growth forecast to 0.6% and inflation rate (excluding fresh food) to 2.7%. Inflation forecasts for fiscal years 2026 and 2027 were also adjusted to 1.8% and 2.0%, respectively, while GDP growth projections for the same years remain unchanged at 0.7% and 1.0%. The BOJ’s quarterly “Outlook for Economic Activity and Prices” report highlights these updates.
