The Bank of Japan left its policy rate at 1% on Friday in an 8-1 vote, matching
expectations; last month it raised the rate to the highest level since 1995.
Board member Takata dissented, calling for a 25bp hike and saying conditions
have entered a new phase that requires flexible action to address upside price
risks and shifting overseas financial conditions. The BOJ said it will continue
to raise rates as warranted by economic and price developments and financial
conditions, that underlying inflation is close to 2%, and that financial
conditions remain accommodative. In its latest outlook the BOJ cut FY2026 core
CPI to 2.5% from 2.8% and nudged FY2026 GDP growth to 0.6% from 0.5%.
