According to the summary of opinions from the Bank of Japan’s September policy meeting, the central bank suggested that further interest rate hikes remain possible if its expectations for economic activity and prices materialize.
Policymakers emphasized the need to assess whether these expectations are being met “without any preconceptions.” Although U.S. tariffs are still expected to slow economic growth even after being reduced to 15%, the overall economic outlook will experience a temporary slowdown.
Regarding prices, with cost-push pressures related to food easing, the consumer price index (CPI) growth rate is expected to remain below 2% in fiscal year 2026.
Some members noted that given it has been over six months since the last rate hike, it might be time to consider raising rates again.
However, other members believed that uncertainties surrounding the U.S. economic slowdown should prompt the central bank to maintain current accommodative policies and warned against unexpected rate hikes.
