The Bank of Japan emphasized that any future rate hikes will depend on whether its economic and price outlook materializes, the summary of opinions from its June Monetary Policy Meeting showed.
It added that while inflation has slightly exceeded expectations, economic growth is expected to slow, and CPI improvement may be sluggish.
Given risks from global trade tensions and geopolitical instability, the central bank sees it appropriate to keep the current accommodative stance.
The BoJ aims to gradually reduce its Japanese government bond purchases to allow long-term interest rates to be market-driven, but warns that moving too quickly could destabilize markets.
It plans to slow the reduction pace to ¥200 billion per month starting April 2026, with an interim review in June 2026, stressing this does not imply a shift in policy stance.
It also noted that rice prices have nearly doubled from a year ago, pushing up CPI and affecting inflation expectations, warranting close monitoring.