Bank of Japan Press conference comparison — 17 June 2025 vs 19 September 2025
This Bank of Japan press conference comparison covers 17 June 2025 and 19 September 2025. Overall, the newer document was more hawkish. The Bank held its policy rate at 0.5% but September marked a hawkish turn in intent: two members pushed for an immediate move to 0.75% and it launched its first concrete plan to sell ETF and REIT holdings, even as the Governor continued to flag tariff-driven downside risks. With tightening pressure broadening inside the board and a new balance-sheet action in hand, the bar for a near-term hike has lowered, though the next move…
What changed
More hawkish. The Bank held its policy rate at 0.5% but September marked a hawkish turn in intent: two members pushed for an immediate move to 0.75% and it launched its first concrete plan to sell ETF and REIT holdings, even as the Governor continued to flag tariff-driven downside risks. With tightening pressure broadening inside the board and a new balance-sheet action in hand, the bar for a near-term hike has lowered, though the next move still depends on confirming underlying inflation and how the tariff fallout evolves.
- Inflation — More hawkish. Price framing has moved from a 'temporary supply shock with expectations not yet anchored' to CPI holding in the upper 2% range with ongoing wage pass-through and the stability target 'broadly attained', even as food-price effects are expected to fade.
- Labour Market — Little changed. The current key passages contain no wage- or tariff-transmission discussion, so the labour-market signal from the prior document is carried over without a directional shift.
- Rate Path — More hawkish. The hold moved from a unanimous decision to a majority vote with two members dissenting for an immediate hike to 0.75%, while the conditional commitment to keep raising rates is retained — the tightening bias is visibly firmer.
- Balance Sheet — More hawkish. On top of the ongoing JGB taper, the Bank issued its first concrete plan to begin selling ETFs (~330bn yen per year) and J-REITs (~5bn yen per year), an incremental reduction of its risk-asset footprint, albeit framed as gradual and pausable.
Key wording
Regarding the monetary market operations policy, we decided unanimously to maintain the current policy of encouraging the uncollateralized overnight call rate to remain around 0.5%.
As a result, we decided by a majority vote to reduce the monthly planned purchase amount by approximately 400 billion yen per quarter until March 2026, and by approximately 200 billion yen per quarter from April to June 2026 onwards, with the goal of reaching approximately 2 trillion yen by January-March 2027.
Member Tamura submitted a proposal to reduce the monthly planned purchase amount by approximately 400 billion yen per quarter through January-March 2027, arguing that the formation of long-term interest rates should be left to the market and its participants; however, this proposal was rejected by a majority vote.
There are various risk factors surrounding the outlook, but uncertainty is extremely high, particularly regarding the future development of trade policies in various countries and the resulting trends in overseas economies and prices. We must closely monitor the impact on financial and foreign exchange markets, as well as on the Japanese economy and prices.
if the aforementioned economic and price outlook is realized, we believe we will continue to raise the policy interest rate and adjust the degree of monetary easing in response to improvements in economic and price conditions.
we judged it appropriate to continue the reduction of 400 billion yen [per quarter] until January-March of next year, and from April 2026 onwards, reduce the monthly planned purchase amount by 200 billion yen [per quarter], reaching approximately 2 trillion yen by January-March 2027.
we decided by a majority vote to maintain the existing guideline of encouraging the uncollateralized overnight call rate to remain at around 0.5 percent.
Specifically, ETFs will be sold to the market at a pace of approximately 330 billion yen per year on a book-value basis, and J-REITs at a pace of approximately 5 billion yen per year on a book-value basis, based on prices formed in the exchange market.
since practical examination based on that has also come into view, we judged that it was appropriate at this timing to decide to begin the disposal of ETFs and other assets. This judgment was not made with any particular stock price level in mind.
As for prices, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is in the upper 2 percent range recently, due to the effects of rising prices of food items such as rice, while the pass-through of wage increases to selling prices continues.
Member Takata proposed, on the grounds that the norm of prices not rising has shifted and the achievement of the price stability target has been broadly attained, and Member Tamura proposed, on the grounds that upside risks to prices are growing and that the policy interest rate should be brought somewhat closer to the neutral interest rate, a proposal to raise the policy interest rate to around 0.75 percent in each case, but this was rejected by a majority vote.
Regarding bonds, we have already begun gradually reducing, as a result, the amount purchased during large-scale easing, and regarding ETFs, we decided today to begin in the near future.
Official documents
Background reading
Related
17 June 2025 press conference · 19 September 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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