FLASH BoJ keeps rates unchanged at 1.00%, as expected, through 8-1 vote, while it stated that it will consider the timing and pace of rate hikes while examining the likelihood of realising baseline scenario risks, with eye on impact of Middle East developments

Says:

Will continue to raise interest rates in response to economic and price developments, as well as financial conditions.

Will conduct monetary policy as appropriate from the perspective of sustainably and stably achieving the inflation target.

Takata dissented and proposed a 25bps hike, which was turned down by a majority vote.

Underlying inflation is likely to reach level consistent with price target between second half of fiscal 2026 and fiscal 2027.

Risks to prices are skewed to the upside.

Risks to economic outlook are evenly balanced.

Exports and output likely to increase moderately.

Recent rally in yen is likely to lead to an increase in prices mainly of durable goods.

The mechanism which wages and price rises moderately in interaction with each other will be maintained.

Underlying inflation has been approaching 2%.

Financial conditions have been accommodative.

Outlook ReportReal GDP:

Fiscal 2026 median forecast at 0.6% (prev. 0.5%)

Fiscal 2027 median forecast at 0.8% (prev. 0.7%)

Fiscal 2028 median forecast at 0.8% (prev. 0.8%)

Core CPI:

Fiscal 2026 median forecast at 2.5% (prev. 2.8%)

Fiscal 2027 median forecast at 2.4% (prev. 2.3%)

Fiscal 2028 median forecast at 2.0% (prev. 2.0%)