Bank of Japan Possibilities: Ideas later.

Bank of Japan likely to maintain policy rate, lift growth forecasts

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TOKYO (Kyodo) -- The Bank of Japan is expected to keep its benchmark interest rate steady for a third straight meeting at its two-day policy meeting next week, sources familiar with the matter said Monday, as it assesses the impact of inflationary pressures amid stubbornly high crude oil prices.

The benchmark rate is likely to be left unchanged at 0.75 percent, with the Policy Board also expected to announce at the end of the meeting on April 28 an upward revision to its economic and inflation forecasts for fiscal 2026, the sources said.

The central bank has been considering raising rates as it views the current level as significantly low after accounting for inflation. It may, however, wait until late in the meeting to decide amid uncertainty over U.S.-Iran ceasefire talks.

"It is extremely difficult to determine how to respond to (escalating tensions in the Middle East) with monetary policy," BOJ chief Kazuo Ueda said at a press conference in Washington last week.

"We will assess the risks to determine policy," he added.

The BOJ is expected to maintain its push to raise interest rates on the back of sharp pay hikes seen in this year's "shunto" wage talks, but is believed to have weighed the risk of stagflation -- a state of high inflation, high unemployment and sluggish economic growth -- as crude oil prices surge due to the U.S.-Israeli attacks on Iran.

The bank, which lifted its benchmark rate to 0.75 percent in December, will announce its outlook report, which includes its real gross domestic product outlook for fiscal 2026 through 2028.

Article source:  https://mainichi.jp/english/articles/20260421/p2g/00m/0bu/002000c