By Tomoki Okamoto / Yomiuri Shimbun Staff Writer
The Bank of Japan is expected to maintain its policy rate at around 0.75% at its next Monetary Policy Meeting, which will be held from Thursday to Friday, according to sources.
Such a decision would reflect the opinions of BOJ members who feel that time is needed to assess the impact of the latest policy rate hike on price trends and the overall economy.
The BOJ raised the policy rate to around 0.75%, the highest level since 1995, at the previous policy meeting in December. The central bank aims to confirm the impact of the policy rate hike on economic activity such as corporate fundraising. It also plans to assess how wage increases and the yen's depreciation in foreign exchange markets will affect commodity prices.
The BOJ will also release its quarterly Outlook for Economic Activity and Prices at the meeting. In this report, the central bank will likely revise its forecast for the growth of Japan's gross domestic product in fiscal 2025 and fiscal 2026, which starts in April. The outlook -- calculated as the median value of predictions by the bank's nine Policy Board members -- is expected to be higher than the previous forecast, issued last October, which was 0.7% for both fiscal years, as the members will this time take into account the impact of economic measures announced by the administration of Prime Minister Sanae Takaichi.
The BOJ attaches great importance to underlying inflation -- which excludes changes in commodity prices that are experiencing volatility -- in making monetary policy decisions. In the previous report, the central bank revealed a prediction that the goal of reaching 2% underlying inflation will be achieved somewhere between the second half of fiscal 2026 and the end of fiscal 2027. The BOJ is expected to maintain this outlook in the new report.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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January 19, 2026 01:34 ET (06:34 GMT)
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