News

IMF Urges Japan to Hike Rates, Avoid Tax Cuts
The International Monetary Fund on Wednesday called on Japan to continue raising interest rates and refrain from loosening fiscal policy, adding that cutting the consumption tax would “erode fiscal space and add to fiscal risks.” The advice comes after Prime Minister Sanae Takaichi’s landslide win and her pledge to suspend the 8% food tax for two years, raising concerns about potential pressure on monetary policy. The global lender also stressed the Bank of Japan’s “continued independence and credibility,” saying it is “appropriately withdrawing monetary accommodation” and that gradual hikes should move rates toward neutral by 2027. The Bank of Japan ended its stimulus in 2024 and lifted rates to 0.75% in December, a 30-year high. With inflation above 2% for nearly four years, the IMF expects two more hikes this year and another in 2027. It also welcomed Japan’s commitment to a flexible exchange rate, saying it would help absorb external shocks and maintain price stability.
Published on 2026-02-18

IMF Urges Japan to Hike Rates, Avoid Tax Cuts
The International Monetary Fund urged Japan to continue raising interest rates and refrain from loosening fiscal policy, warning that cutting the consumption tax would “erode fiscal space and add to fiscal risks.” The advice comes after Prime Minister Sanae Takaichi’s landslide win and her pledge to suspend the 8% food tax for two years, raising concerns about potential pressure on monetary policy. The IMF on Wednesday stressed the Bank of Japan’s “continued independence and credibility,” saying it is “appropriately withdrawing monetary accommodation” and that gradual hikes should move rates toward neutral by 2027. The Bank of Japan ended its stimulus in 2024 and lifted rates to 0.75% in December, a 30-year high. With inflation above 2% for nearly four years, the IMF expects two more hikes this year and another in 2027. It also welcomed Japan’s commitment to a flexible exchange rate, saying it would help absorb external shocks and maintain price stability.
Published on 2026-02-18

IMF Urges Japan to Hike Rates, Avoid Tax Cuts
The International Monetary Fund on Wednesday urged Japan to continue raising interest rates and refrain from loosening fiscal policy, warning that cutting the consumption tax would “erode fiscal space and add to fiscal risks.” The advice comes after Prime Minister Sanae Takaichi’s landslide win and her pledge to suspend the 8% food tax for two years, raising concerns about potential pressure on monetary policy. The IMF stressed the Bank of Japan’s “continued independence and credibility,” saying it is “appropriately withdrawing monetary accommodation” and that gradual hikes should move rates toward neutral by 2027. The Bank of Japan ended its stimulus in 2024 and lifted rates to 0.75% in December, a 30-year high. With inflation above 2% for nearly four years, the IMF expects two more hikes this year and another in 2027. It also welcomed Japan’s commitment to a flexible exchange rate, saying it would help absorb external shocks and maintain price stability.
Published on 2026-02-18

IMF Urges Japan to Hike Rates, Avoid Tax Cuts
The International Monetary Fund on Wednesday urged Japan to continue raising interest rates and refrain from loosening fiscal policy, warning that cutting the consumption tax would “erode fiscal space and add to fiscal risks.” The advice comes after Prime Minister Sanae Takaichi’s landslide win and her pledge to suspend the 8% food tax for two years, raising concerns about potential pressure on monetary policy. The global lender also stressed the Bank of Japan’s “continued independence and credibility,” saying it is “appropriately withdrawing monetary accommodation” and that gradual hikes should move rates toward neutral by 2027. The Bank of Japan ended its stimulus in 2024 and lifted rates to 0.75% in December, a 30-year high. With inflation above 2% for nearly four years, the IMF expects two more hikes this year and another in 2027. It also welcomed Japan’s commitment to a flexible exchange rate, saying it would help absorb external shocks and maintain price stability.
Published on 2026-02-18

IMF Urges Japan to Hike Rates, Avoid Tax Cuts
The International Monetary Fund on Wednesday called on Japan to continue raising interest rates and refrain from loosening fiscal policy, warning that cutting the consumption tax would “erode fiscal space and add to fiscal risks.” The advice comes after Prime Minister Sanae Takaichi’s landslide win and her pledge to suspend the 8% food tax for two years, raising concerns about potential pressure on monetary policy. The global lender also stressed the Bank of Japan’s “continued independence and credibility,” saying it is “appropriately withdrawing monetary accommodation” and that gradual hikes should move rates toward neutral by 2027. The Bank of Japan ended its stimulus in 2024 and lifted rates to 0.75% in December, a 30-year high. With inflation above 2% for nearly four years, the IMF expects two more hikes this year and another in 2027. It also welcomed Japan’s commitment to a flexible exchange rate, saying it would help absorb external shocks and maintain price stability.
Published on 2026-02-18

BoJ Masu Says Further Rate Hikes Needed
Further interest rate hikes will be necessary to complete Japan’s monetary policy normalization, central bank board member Kazuyuki Masu said in a speech on Friday. Masu noted that raising rates would help reduce the policy divergence between Japan and other major economies, a gap widely seen as a key driver of prolonged yen weakness that has pushed up import costs for businesses and households. Masu stressed that policy tightening must be handled carefully. He said timely and appropriate rate hikes are needed to keep underlying inflation below 2%, while warning against raising rates too aggressively in a way that could disrupt the gradual upward trend in wages and inflation. The speech was Masu’s first public appearance since joining the Bank of Japan’s nine-member board last July, when he characterized his stance as balanced between hawkish and dovish views.
Published on 2026-02-06

BoJ Masu Says Further Rate Hikes Needed
Further interest rate hikes will be necessary to complete Japan’s monetary policy normalization, Bank of Japan board member Kazuyuki Masu said in a speech on Friday. Masu noted that raising rates would help reduce the policy divergence between Japan and other major economies, a gap widely seen as a key driver of prolonged yen weakness that has pushed up import costs for businesses and households. Masu stressed that policy tightening must be handled carefully. He said timely and appropriate rate hikes are needed to keep underlying inflation below 2%, while warning against raising rates too aggressively in a way that could disrupt the gradual upward trend in wages and inflation. The speech was Masu’s first public appearance since joining the BoJ’s nine-member board last July, when he characterized his stance as balanced between hawkish and dovish views.
Published on 2026-02-06

BoJ Masu Says Further Rate Hikes Needed
Further interest rate hikes will be necessary to complete Japan’s monetary policy normalization, central bank board member Kazuyuki Masu said in a speech on Friday. Masu noted that raising rates would help reduce the policy divergence between Japan and other major economies, a gap widely seen as a key driver of prolonged yen weakness that has pushed up import costs for businesses and households. Masu stressed that policy tightening must be handled carefully. He said timely and appropriate rate hikes are needed to keep underlying inflation below 2%, while warning against raising rates too aggressively in a way that could disrupt the gradual upward trend in wages and inflation. The speech was Masu’s first public appearance since joining the BoJ’s nine-member board last July, when he characterized his stance as balanced between hawkish and dovish views.
Published on 2026-02-06

BoJ Downplays Behind-the-Curve Risk: January Meeting Summary
The Bank of Japan’s risk of falling behind the curve has not increased markedly, a summary of opinions at its January meeting showed. Still, careful and timely policy execution is seen as increasingly vital. With real interest rates still deeply negative, and assuming the central bank’s outlook for activity and prices holds, further rate hikes are considered appropriate. The board is gauging each move’s impact on growth, inflation, and financial conditions, pursuing gradual tightening, though policy remains highly accommodative amid yen weakness Underlying inflation has moved closer to the 2% target, supporting the case for continued adjustments. Looking ahead, shifts in overseas rate environments could heighten the risk of lagging policy. Japan’s real policy rate remains the lowest globally, and forex markets’ sensitivity to rate differentials underscores the need to narrow the gap. Yen weakness and rising yields largely reflect fundamentals, leaving timely hikes as the key response.
Published on 2026-02-02

BoJ Board Eyes Further Hikes: December Minutes
The Bank of Japan’s December minutes showed board members favored continued rate hikes if the outlook for growth and prices holds, while keeping an overall accommodative stance. They judged the economy had recovered moderately, though manufacturing profits faced pressure from U.S. tariffs. Still, the impact had not spread broadly to investment, jobs, or wages. Exports and industrial output were seen as flat, while private consumption remained resilient, supported by income and employment gains, though higher prices weighed somewhat. On inflation, most members expected core CPI to slow below 2% through the first half of fiscal 2026 as food costs ease and government measures curb price pressures. They agreed financial conditions would stay accommodative even with a 0.75% policy rate, noting real rates remain deeply negative. Most stressed policies should be decided on a meeting-by-meeting basis, without a preset pace, based on careful assessment of economic, price, and financial trends.
Published on 2026-01-28

BOJ Board Eyes Further Hikes: December Minutes
The Bank of Japan’s December minutes showed board members favored continued rate hikes if the outlook for growth and prices holds, while keeping an overall accommodative stance. They judged the economy had recovered moderately, though manufacturing profits faced pressure from U.S. tariffs. Still, the impact had not spread broadly to investment, jobs, or wages. Exports and industrial output were seen as flat, while private consumption remained resilient, supported by income and employment gains, though higher prices weighed somewhat. On inflation, most members expected core CPI to slow below 2% through the first half of fiscal 2026 as food costs ease and government measures curb price pressures. They agreed financial conditions would stay accommodative even with a 0.75% policy rate, noting real rates remain deeply negative. Most stressed policies should be decided on a meeting-by-meeting basis, without a preset pace, based on careful assessment of economic, price, and financial trends.
Published on 2026-01-28

BoJ Board Eyes Further Hikes: December Minutes
The Bank of Japan’s December minutes showed board members favored continued rate hikes if the outlook for growth and prices holds, while keeping an overall accommodative stance. They judged the economy had recovered moderately, though manufacturing profits faced pressure from U.S. tariffs. Still, the impact had not spread broadly to investment, jobs, or wages. Exports and industrial output were seen as flat, while private consumption remained resilient, supported by income and employment gains, though higher prices weighed somewhat. On inflation, most members expected core CPI to slow below 2% through the first half of fiscal 2026 as food costs ease and government measures curb price pressures. They agreed financial conditions would stay accommodative even with a 0.75% policy rate, noting real rates remain deeply negative. Most stressed policies should be decided on a meeting-by-meeting basis, without a preset pace, based on careful assessment of economic, price, and financial trends.
Published on 2026-01-28

BoJ Holds Rate, Raises Growth and Inflation Outlook
The Bank of Japan kept its key short-term interest rate unchanged at 0.75% at its first policy meeting of 2026, maintaining borrowing costs at their highest level since September 1995, ahead of February's snap election. The widely expected decision was backed by an 8–1 vote, with board member Hajime Takata calling for a hike while others viewed risks to the economic and price outlook as broadly balanced. Policymakers reiterated that rates could rise further, following two hikes in 2025, if activity and inflation evolve in line with projections. In its quarterly outlook, the board raised its FY 2025 GDP growth to 0.9% from 0.7%, citing support from a recent trade deal with Washington and Tokyo’s large stimulus package, which includes subsidies for electricity and gas bills, expanded local government grants, and higher defense spending. The FY 2026 GDP forecast was also lifted to 1.0% from 0.7%, while the core consumer inflation outlook for FY 2026 was nudged up to 1.9% from 1.8%.
Published on 2026-01-23

BoJ Holds Rate at 0.75% as Expected
The Bank of Japan kept its benchmark short-term rate unchanged at 0.75% in its first meeting in 2026, maintaining borrowing costs at their highest level since September 1995. The decision, in line with market expectations, was approved by an 8-1 vote.
Published on 2026-01-23

BoJ Holds Rate at 0.75% as Expected
The Bank of Japan kept its benchmark short-term rate unchanged at 0.75% in its first meeting in 2026, maintaining borrowing costs at their highest level since September 1995. The decision, in line with market expectations, was approved by an 8-1 vote. In its quarterly outlook, the central bank kept its forecast for core inflation at 2.7% in FY 2025, projecting a fall to 1.9% in FY 2026 before edging up to 2.0% in FY 2027. The outlook revised GDP growth for FY 2025 upward to 0.9% from 0.7%, supported by a trade deal with Washington and Tokyo’s large stimulus package, which includes subsidies for electricity and gas bills, expanded local government grants, and increased spending on defense and diplomatic capabilities. GDP growth is expected to moderate to 1.0% in FY 2026 and 0.8% in 2027.
Published on 2026-01-23

BoJ Holds Rate at 0.75% as Expected
The Bank of Japan kept its benchmark short-term rate unchanged at 0.75% in its first meeting in 2026, maintaining borrowing costs at their highest level since September 1995. The decision, in line with market expectations, was approved by an 8-1 vote. In its quarterly outlook, the central bank kept its forecast for core inflation at 2.7% in FY 2025, projecting a fall to 1.9% in FY 2026 before edging up to 2.0% in FY 2027. The outlook revised GDP growth for FY 2025 upward to 0.9% from 0.7%, supported by a trade deal with Washington and Tokyo’s large stimulus package, which includes subsidies for electricity and gas bills, expanded local government grants, and increased spending on defense and diplomatic capabilities. GDP growth is expected to moderate to 1.0% in FY 2026 and 0.8% in 2027.
Published on 2026-01-23

BoJ Holds Rate at 0.75% as Expected
The Bank of Japan kept its benchmark short-term rate unchanged at 0.75% in its first meeting in 2026, maintaining borrowing costs at their highest level since September 1995. The decision, in line with market expectations, was approved by an 8-1 vote. In its quarterly outlook, the central bank revised higher FY 2025 GDP growth to 0.9% from 0.7%, supported by a trade deal with Washington and Tokyo's large stimulus package, including subsidies for electricity and gas bills, expanded local government grants, and spending to strengthen defense and diplomatic capabilities. Meantime, GDP projections for FY 2026 and 2027 stood at 1.0% and 0.8%, respectively. Regarding inflation, the board kept its forecast for core inflation at 2.7% in FY 2025, projecting a decline to 1.9% in FY 2026 before edging up to 2.0% in FY 2027.
Published on 2026-01-23

BoJ Holds Rate at 0.75%, Raises Growth and Inflation Outlook
The Bank of Japan kept its benchmark short-term rate unchanged at 0.75% in its first meeting in 2026, maintaining borrowing costs at their highest level since September 1995. The decision, in line with market expectations, was approved by an 8-1 vote. In its quarterly outlook, the central bank revised up its FY 2025 GDP growth forecast to 0.9% from 0.7% made in October, citing support from a trade deal with Washington and Tokyo’s large stimulus package. The package includes subsidies for electricity and gas bills, expanded grants to local governments, and increased spending to bolster defense and diplomatic capabilities. The GDP growth outlook for FY 2026 was also raised to 1.0% from 0.7%. On inflation, the board slightly lifted its core consumer inflation forecast for fiscal 2026 to 1.9% from 1.8%.
Published on 2026-01-23

BoJ Holds Rate at 0.75%, Raises Growth and Inflation Outlook
The Bank of Japan kept its key short-term interest rate unchanged at 0.75% at its first policy meeting of 2026, maintaining borrowing costs at their highest level since September 1995. The widely expected decision was approved by an 8–1 vote, with policymakers judging risks to the economic and price outlook as broadly balanced. The central bank reiterated that it would raise rates further if activity and inflation evolve in line with projections. In its quarterly outlook, the board revised up GDP growth for FY 2025 to 0.9% from 0.7%, citing support from a recent trade deal with Washington and Tokyo’s large stimulus package, which includes subsidies for electricity and gas bills, expanded local government grants, and higher spending on defense and diplomatic capabilities. The FY 2026 GDP forecast was also lifted to 1.0% from 0.7%. Meanwhile, the core consumer inflation outlook for FY 2026 was revised higher to 1.9% from 1.8%.
Published on 2026-01-23

BoJ Holds Rate at 0.75%, Raises Growth and Inflation Outlook
The Bank of Japan kept its key short-term interest rate unchanged at 0.75% at its first policy meeting of 2026, maintaining borrowing costs at their highest level since September 1995, ahead of a snap election in February. The widely expected decision was approved by an 8–1 vote, with board member Hajime Takata proposing higher rates while others judged risks to the economic and price outlook as broadly balanced. The central bank added that it would raise rates further if activity and inflation evolve in line with projections. In its quarterly outlook, the board revised up GDP growth for FY 2025 to 0.9% from 0.7%, citing support from a recent trade deal with Washington and Tokyo’s large stimulus package, which includes subsidies for electricity and gas bills, expanded local government grants, and higher spending on defense. The FY 2026 GDP forecast was also lifted to 1.0% from 0.7%. Meanwhile, the core consumer inflation outlook for FY 2026 was revised higher to 1.9% from 1.8%.
Published on 2026-01-23