Bank of Japan Press conference comparison — 19 September 2025 vs 30 October 2025

This Bank of Japan press conference comparison covers 19 September 2025 and 30 October 2025. Overall, the newer document was more hawkish. The Bank of Japan held its policy rate at 0.5 percent for a second straight meeting, but the tone of communication tilted more hawkish: wage growth and labour shortages are now the explicit test for the next move, and officials pushed back on the idea that a December hike is off the table. For subscribers, this keeps a near-term tightening option alive, with the next decision hinging on early evidence from next spring's wage…

What changed

More hawkish. The Bank of Japan held its policy rate at 0.5 percent for a second straight meeting, but the tone of communication tilted more hawkish: wage growth and labour shortages are now the explicit test for the next move, and officials pushed back on the idea that a December hike is off the table. For subscribers, this keeps a near-term tightening option alive, with the next decision hinging on early evidence from next spring's wage negotiations rather than on any pre-commitment.

Inflation — Little changed. Headline CPI was upgraded from 'upper 2% range' to 'around 3%' on food and wage pass-through, but the read stays mixed because the Bank projects it falling below 2% in H1 next fiscal year while dismissing food inflation as transient and flagging its drag on consumption.
Labour Market — More hawkish. Labour market was not a distinct signal in the prior set but is now a dedicated hawkish theme, with the wage-price mechanism, intensifying labour shortages and early shunto momentum framed as the condition that would justify a hike.
Rate Path — More hawkish. The hold at 0.5% with two dissents is unchanged, but the guidance hardened: the Bank rebutted the idea that budget compilation rules out a December move, lowered the wage-data bar to early shunto momentum, and reasserted that continued rate hikes remain the path if the outlook is realised, even as FY2026 downside risks and neutral-rate uncertainty pull the other way.
Balance Sheet — Little changed. Balance-sheet operations, the dominant theme of the prior set with the launch of ETF/REIT disposal, are absent from the current passages, implying the gradual sale plan and its flexible-adjustment caveat are unchanged rather than revisited.

Key wording

19 September 2025

we decided by a majority vote to maintain the existing policy of encouraging the uncollateralized overnight call rate to remain at around 0.5%.
rate path: Policy rate held at 0.5% as expected; no surprise.

Member Takada submitted a proposal to raise the policy interest rate to around 0.75%, arguing that the norm of prices not rising has shifted and that the achievement of the price stability target has been broadly attained. Member Tamura also submitted a proposal to raise the policy rate to around 0.75%, citing the need to move closer to the neutral interest rate amid growing upside risks to prices.
rate path: Two members dissented in favor of a hike, signaling internal pressure to normalize.

the year-on-year rate of change in the consumer price index (excluding fresh food) is currently in the upper 2% range, due to the continued pass-through of wage increases to selling prices and the impact of rising food prices such as rice.
inflation: Inflation remains above target but driven by one-off factors; underlying pressure uncertain.

There are various risk factors surrounding this outlook, but in particular, uncertainty regarding future developments in trade policies of various countries and their impact on overseas economic and price developments remains high, and it is necessary to pay close attention to their impact on financial and foreign exchange markets and Japan's economy and prices.
rate path: Trade policy uncertainty remains a key risk; BoJ is on hold pending clarity.

Given that the current real interest rate is at an extremely low level, if the above outlook for the economy and prices is realized, we think 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.
rate path: Explicit signal that further rate hikes are coming if outlook holds.

we judged it appropriate to decide to start the disposal of ETFs and others at this timing.
balance sheet: Start of ETF unwinding signals gradual exit from massive QE.

30 October 2025

Regarding today's meeting, first, we decided by majority vote to maintain the guideline for money market operations of encouraging the uncollateralized overnight call rate to remain at around 0.5 percent. Member Takata proposed raising the policy interest rate to around 0.75 percent, on the grounds that the norm of prices not rising has shifted and the achievement of the price stability target has generally been realized, and Member Tamura also proposed raising it to around 0.75 percent, on the grounds that upside risks to prices are growing and that we should move somewhat closer to the neutral interest rate, but these proposals were rejected by majority vote.
rate path: Policy rate held at 0.5%, but two board members dissented for 0.75%, showing hawkish pressure.

As for the risk balance of the economic outlook, in light of the impact of various countries' trade policies and other factors, downside risks are considered to be larger for fiscal 2026.
rate path: Downside growth risks for FY2026 tilt the risk balance against near-term tightening.

As for prices, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is at around 3 percent for the time being, due to the effects of rising prices of food items such as rice, while the pass-through of wage increases to selling prices continues. As for the outlook, as the effects of rising prices of food items such as rice diminish, the year-on-year rate of change in the CPI (all items less fresh food) is expected to shrink its positive range to a level below 2 percent toward the first half of next fiscal year.
inflation: CPI near 3% on food and wage pass-through, but projected to fall below 2% in H1 next fiscal year, a mixed near-term signal.

In conducting monetary policy, given that the current real interest rate is at a very low level, if the economic and price outlook described above is realized, we believe that we will continue to raise the policy interest rate and adjust the degree of monetary accommodation in accordance with improvements in economic and price conditions.
rate path: Explicitly signals continued rate hikes if outlook realized, anchoring hawkish bias.

We do not have any preconception at this point about whether or when to raise rates.
rate path: No pre-commitment on timing keeps optionality for future meetings and avoids locking in a hike path.

As we always say, we will formulate economic and price outlooks properly, and as the probability of their realization—currently, the probability of their realization—rises, we will adjust the policy interest rate as appropriate and adjust the degree of monetary accommodation, aiming to achieve the 2 percent price stability target in a sustainable and stable manner.
rate path: Reinforces a conditional hike reaction function as confidence in the outlook improves.

Official documents

Background reading

19 September 2025 press conference · 30 October 2025 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology