BOJ to stand pat on rates in July, may raise growth forecast
TOKYO (Kyodo) -- The Bank of Japan is expected to keep its key interest rate steady at its policy meeting in late July while likely revising upward its economic growth outlook for the current fiscal year on strong demand related to artificial intelligence, sources familiar with the matter said Friday.
Keeping the short-term policy rate at around 1.0 percent after raising it to a 31-year high at the previous meeting would allow the central bank more time to assess the impact of the latest rate hike, as well as rising crude oil prices, on businesses and households.
The BOJ raised the key rate in June for the first time since December, warning that elevated crude oil prices due to the Middle East conflict and the weak yen could heighten inflation risks.
The BOJ will continue to assess the economic situation ahead of the two-day policy meeting starting July 30.
Many view current financial conditions as accommodative, raising concerns that the economy could overheat and push prices higher, while the BOJ has maintained its stance of continuing to raise interest rates. Attention is shifting to when the next rate hike will come, with the central bank's next policy meeting after July scheduled for September.
Following the July meeting, the central bank will also release its quarterly economic outlook for fiscal 2026 through 2028. It has projected the Japanese economy to grow 0.5 percent in the current fiscal year, which began in April.
Article source: https://mainichi.jp/english/articles/20260717/p2g/00m/0bu/040000c
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