Bank of Japan is set to keep interest rates unchanged at the July meeting, maintain tightening guidance
- BoJ set to keep interest rates unchanged in July but maintain policy guidance pledging to continue raising rates
- BoJ may revise up fiscal 2026 economic growth forecast in quarterly report due in July, keep focus on risk of inflation overshoot
The Bank of Japan is set to leave its benchmark interest rate unchanged at its July monetary policy meeting, while maintaining forward guidance that signals additional rate hikes remain likely if economic and inflation trends continue to evolve in line with its expectations, according to sources.
Although policymakers are not anticipated to adjust borrowing costs this month, the central bank is expected to reaffirm its commitment to gradually normalizing monetary policy. Officials are likely to stress that future rate increases will remain data-dependent, with sustained wage growth and underlying inflation continuing to play a central role in policy decisions.
Alongside the policy announcement, the BoJ is also expected to revise upward its fiscal 2026 economic growth forecast in its quarterly Outlook Report. The stronger outlook would reflect greater resilience in domestic demand, improving corporate investment, and the impact of robust wage increases, which have helped support household spending despite elevated prices.
At the same time, policymakers are expected to keep a close watch on inflation risks. While Japan's inflation has moderated from recent peaks, the BoJ is increasingly focused on the possibility that underlying price pressures could prove more persistent than previously anticipated. Strong wage settlements and resilient domestic demand have raised concerns that inflation could overshoot the central bank's 2% target for a prolonged period.
The market was already pricing in a 97% probability of no change at the upcoming meeting, so this news doesn't change anything. Traders expect the next rate hike to come in December at the earliest.
This article was written by flfeaa2662d774455a8d50fa77b791ed5f at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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