MNI BoJ Review-June 2025: QT Taper Mildly More Dovish

EXECUTIVE SUMMARY: 

• The BoJ decided to keep its policy rate unchanged at 0.50%, a move fully expected by markets and consensus economists. The decision was made by a unanimous 9-0 vote from the Monetary Policy Committee (MPC).
• The primary focus of the meeting was the pace of quantitative tightening (QT) beyond the near term. From the second quarter of 2026 through the first quarter of 2027, it will slow that pace to ¥200 billion per quarter.
• The BoJ’s policy statement maintained its existing economic and inflation outlook, aside from technical changes to incorporate recent higher inflation prints.
• Importantly, Ueda stated that the BoJ may consider raising interest rates without needing to see clear-cut new signs of rising inflation, should the economic outlook and forecast trajectory warrant such action.
• Overall, the BoJ continues to signal a gradual, data-dependent approach to policy normalisation, balancing market stability, inflation developments, and global uncertainties as it proceeds with cautious tapering into 2026 and beyond.

FOR THE FULL PUBLICATION, PLEASE USE THE FOLLOWING LINK: BOJ Review - June 2025.pdf