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 again but sharpened its hawkish bias: inflation is now described as running near 3% with wages feeding through, officials erased the December budget-season obstacle, and they signalled that only early momentum from next spring's wage talks is needed before raising rates. With the hold explicitly framed as data-dependent rather than a retreat, the next meeting or two — particularly the October-to-January window flagged earlier — is…

What changed

More hawkish. The Bank of Japan held its policy rate again but sharpened its hawkish bias: inflation is now described as running near 3% with wages feeding through, officials erased the December budget-season obstacle, and they signalled that only early momentum from next spring's wage talks is needed before raising rates. With the hold explicitly framed as data-dependent rather than a retreat, the next meeting or two — particularly the October-to-January window flagged earlier — is now the live decision point for a hike, though external downside risks and the yen remain the key swing factors.

Inflation — More hawkish. Inflation characterisation escalated from 'upper 2% range' driven by temporary food effects to 'around 3 percent' with ongoing wage pass-through, and the prior dismissal of food inflation as transitory is replaced by a watch on second-round effects into inflation expectations.
Labour Market — More hawkish. The labour market axis, absent from the September signal set, now features explicitly with the Board lowering the bar — only the initial momentum of next spring's wage talks is needed, not a final agreed number, bringing a wage-linked hike closer.
Rate Path — More hawkish. Guidance firmed from 'wants a bit more data' and downside-risk caution to a conditional commitment to keep raising rates, an explicit rejection of the argument that December's budget season blocks a move, and a cited precedent of hiking after confirming wage gains — while the 0.5% hold carries a persistent 2-versus-7 dissent.
Balance Sheet — Little changed. No new balance-sheet operation is signalled this round, and the sole balance-sheet-flavoured passage rules out using rate hikes to lean against asset-price exuberance — a modest dovish note, but not a directional change from the September ETF disposal start.

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.
rate path: Policy rate held at 0.5%, but two members dissented for a hike, signalling internal hawkish pressure.

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 broadly 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: Two named dissenters wanted an immediate hike to 0.75%, highlighting hawkish tail risk within the Board.

As for prices, the year-on-year rate of change in the consumer price index excluding fresh food has been at around 3 percent 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.
inflation: Current core inflation near 3% with ongoing wage pass-through keeps pressure on the BOJ to normalise policy.

As for the risk balance of the economic outlook, in light of the effects of various countries' trade policies and other factors, downside risks are considered to be larger for fiscal 2026. As for the risk balance of the price outlook, as in the previous Outlook Report, it is considered to be broadly balanced on the upside and downside.
rate path: Downside growth risks for FY2026 offset by balanced price risks, so not a clear trigger for easing or tightening.

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: Explicit conditional commitment to continue hiking if outlook materialises, keeping rate-hike expectations alive.

As for the relationship with policy, we are not considering a policy response of trying to suppress a specific stock price level with a rate hike because it is excessive.
balance sheet: Rules out using rates to lean against asset prices, meaning equity/AI exuberance alone will not force a hike.

Official documents

Background reading

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