The news: The Bank of Japan has kept the cash rate steady at 0.5%, meeting market expectations, and announced it would slow the pace of its cutback on bond-buying after April 2026.
The numbers: This is the third consecutive meeting that the Bank of Japan has left the interest rate unchanged after the last hike in January.
The Bank also reiterated its plan to reduce Japanese government bond buying by ¥400 billion ($4.23 billion) in every quarter to March 2026, in a bid to unwind years of loose monetary policy, when the buying rate will slow to around ¥3 trillion.
It also announced that from April 2026 the quarterly reduction in bond buying will slow to ¥200 billion such that the buying rate falls to around ¥2 trillion by March 2027.
The context: The Bank’s monetary policy statement flagged that there are various risks attached to its economic outlook, particularly that it is “extremely uncertain how trade and other policies in each jurisdiction will evolve and how overseas economic activity and prices will react to them”.
The US is scheduled to impose additional tariffs above the 10% baseline announced in April on more than 60 countries on 9 July.
AloJapan.com