Bank of Japan leaves main policy rate unchanged at 0.5%, as widely expected

Bank of Japan

The yen is strengthening – there were two dissents to the hold decision, both wanting a rate rise.

BOJ policy decision

• BoJ keeps rates unchanged by a 7–2 vote.

• Board members Takata and Tamura dissented.

• Takata: Saw a shift away from the deflationary norm and judged the 2% price stability target “more or less achieved.”

• Tamura: Said with inflation risks skewed to the upside, the policy rate should be set closer to neutral.

Economic assessment

• Economy recovering moderately, though some weakness seen.

• Exports and output remain broadly flat.

• Capital expenditure on a moderate upward trend.

• Private consumption remains resilient.

• Inflation expectations have risen moderately.

• Growth likely to slow due to global trade policies but re-accelerate thereafter.

• Underlying inflation to stagnate with slower growth but gradually accelerate later.

Asset disposals

• BoJ to begin selling ETF and J-REIT holdings.

• Decision on ETF/J-REIT sales made by unanimous vote.

• Sales to proceed “in accordance with the fundamental principles of their disposal.”

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Still to come is Bank of Japan Governor Ueda’s news conference:

• due at 0630 GMT / 0230 US Eastern time

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Background to this:

• Preview – BoJ seen keeping rates at 0.5% as tariffs, U.S. slowdown weigh on outlook

• MUFG expects Bank of Japan to hold off rate rise, sees next hike pushed to January 2026

• Bank of Japan meeting begins today, rates expected to kept on hold – Nikkei report
• BOJ to hold key interest rate at 0.50% in September meeting – poll

• Economic calendar in Asia 19 September 2025 – Japan inflation data, then Bank of Japan

This article was written by Eamonn Sheridan at investinglive.com.