According to the summary of opinions from the Bank of Japan’s September policy meeting, the central bank indicated 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 weigh on economic growth even after being reduced to 15%, the overall economic outlook is projected to slow down temporarily.
Regarding prices, with food-related cost-push pressures 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 argued that uncertainties surrounding the U.S. economic slowdown should prompt the central bank to maintain its current accommodative policy and warned against unexpected rate increases.
