BlockBeats report: On July 31, the Bank of Japan kept its policy rate at 1%, as expected. Last month, the bank raised its benchmark rate to the highest level since 1995.
Bank of Japan policy board member Sō Takada dissented, supporting a 25-basis-point rate hike, stating that the situation has entered a new phase and the Bank of Japan needs to adopt a flexible approach to address upside inflation risks and changes in the global financial environment.
The Bank of Japan stated that it will continue to raise interest rates in line with economic and price developments and financial conditions, as underlying inflation has approached 2%, financial conditions remain accommodative, and both significant downside risks to economic activity and significant upside risks to prices have diminished. In its latest economic forecast, the Bank of Japan lowered its core CPI projection for fiscal year 2026 from 2.8% to 2.5% and raised its GDP growth forecast for fiscal year 2026 from 0.5% to 0.6%. (Kitco)