BOJ Keeps Policy Unchanged, Boosts Japan's GDP Growth Outlook

The Bank of Japan (BOJ) maintained its monetary policy unchanged while raising its GDP growth outlook for fiscal 2026. The BOJ's Policy Board made this decision at a two-day meeting, voting eight to one in favor of maintaining the unsecured overnight call rate around 1%. This rate is Japan's benchmark short-term policy rate.

The BOJ also released its new quarterly Outlook for Economic Activity and Prices report, which includes updated growth projections. The central bank raised its real gross domestic product (GDP) forecast for fiscal 2026 to 0.6% from the previous 0.5%. For fiscal 2027, the growth projection was increased to 0.8% from 0.7%, while the estimate for fiscal 2028 remained unchanged at 0.8%.

However, the BOJ cut its growth estimate for Japan's core consumer price index in fiscal 2026 to 2.5% from 2.8%.