Bank of Japan Press conference comparison — 31 July 2025 vs 19 September 2025
This Bank of Japan press conference comparison covers 31 July 2025 and 19 September 2025. Overall, the newer document was more hawkish. The Bank held its policy rate at 0.5% but the meeting was no longer unanimous: two board members voted for an immediate hike to 0.75%, and the Bank began the concrete disposal of its ETF and J-REIT holdings — the tightening path is intact and the hawkish minority is now visible in the vote. With officials still framing the next move as data- and tariff-risk dependent, the signal is that the next hike is…
What changed
More hawkish. The Bank held its policy rate at 0.5% but the meeting was no longer unanimous: two board members voted for an immediate hike to 0.75%, and the Bank began the concrete disposal of its ETF and J-REIT holdings — the tightening path is intact and the hawkish minority is now visible in the vote. With officials still framing the next move as data- and tariff-risk dependent, the signal is that the next hike is likely to come earlier than a purely unanimous hold would have suggested, making the dissent count the key thing to watch into the next meeting.
- Inflation — Little changed. The July price outlook is essentially carried over — CPI running in the upper-2% range on food effects expected to fade, with wages still passing through — and while officials downplay the risk that softer short-term inflation expectations would derail the target, the net characterisation is little changed.
- Labour Market — Little changed. No labour-market assessment appears in the September key passages, so the July framing of tight labour supply and entrenched Shunto wage-setting stands unrevised rather than updated.
- Rate Path — More hawkish. The unanimous hold has given way to a majority hold with two members (Takata and Tamura) dissenting in favour of an immediate hike to 0.75%, while the standing conditional commitment to keep raising rates if the outlook is realised is retained — a clear hawkish tilt in forward guidance and risk balance.
- Balance Sheet — More hawkish. September converts July's 'no urgency' stance on risk assets into the first concrete runoff schedule — ETFs sold at roughly ¥330bn and J-REITs at roughly ¥5bn per year on a book-value basis — a mild tightening of the Bank's footprint, though officials stress flexibility to pause sales during market stress and confirm the bond taper is continuing.
Key wording
we decided unanimously to maintain the monetary market operation policy of conducting operations to encourage the uncollateralized overnight call rate to remain at around 0.5%.
the underlying rate of increase in consumer prices is expected to struggle to grow due to the impact of the slowing pace of economic growth.
Regarding the risk balance for the economy, taking into account the influence of trade policies in various countries, we view the downside risks as being larger for fiscal 2025 and 2026, similar to the previous Outlook Report. We view the risk balance for the price outlook as being generally balanced between upside and downside.
given that current real interest rates are at an extremely low level, if the aforementioned economic and price outlooks are realized, we believe that 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.
labor supply and demand continue to be tight, and under these conditions, the movement to pass wage increases through to sales prices is continuing.
As for the outlook, the underlying rate of price increase is expected to struggle to grow for a while due to the impact of the slowing pace of economic growth.
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.
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.
if the above outlook for economic and price developments is realized, I believe that the Bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation in accordance with improvements in economic and price conditions.
the underlying rate of increase in the CPI is considered to continue to rise moderately toward 2 percent. Meanwhile, the fact that tariff rates on automobiles and other items were decided as a result of negotiations with the United States is recognized as leading to a reduction in uncertainty surrounding Japan's economy, and I judge that there is no need at present to revise the central outlook for economic and price developments presented in the July Outlook Report.
Therefore, for example, if food inflation declines and short-term household inflation expectations settle accordingly, I do not necessarily think that would be negative for achieving our price stability target.
Official documents
Background reading
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31 July 2025 press conference · 19 September 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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