Bank of Japan Press conference comparison — 30 October 2025 vs 23 January 2026

This Bank of Japan press conference comparison covers 30 October 2025 and 23 January 2026. Overall, the newer document was more hawkish. The Bank has delivered another step in its gradual normalisation, lifting the policy rate to 0.75% and keeping its conditional commitment to raise rates further as long as the economic and price outlook holds, with inflation now described as more firmly entrenched in the mid-2% range rather than cooling. That keeps the tightening bias intact into the next meeting, but the Governor's emphasis on balanced risks, a broad rather than narrow data set and…

What changed

More hawkish. The Bank has delivered another step in its gradual normalisation, lifting the policy rate to 0.75% and keeping its conditional commitment to raise rates further as long as the economic and price outlook holds, with inflation now described as more firmly entrenched in the mid-2% range rather than cooling. That keeps the tightening bias intact into the next meeting, but the Governor's emphasis on balanced risks, a broad rather than narrow data set and no imminent change to the neutral-rate estimate means the next move is data-dependent rather than pre-committed.

Inflation — More hawkish. Inflation messaging shifted from projecting CPI cooling below 2% on fading food-price effects to describing CPI stuck in the mid-2% range with active wage/price pass-through and explicit concern that fiscal measures add upward pressure, with hawkish members Tamura and Takata arguing the target is near or already met.
Labour Market — Little changed. Both documents carry a hawkish labour read — the prior stressing early-wage-momentum as the trigger and the current citing an intensifying labour shortage and rising medium-term inflation expectations — so the framing is reinforced rather than directionally changed.
Rate Path — More hawkish. The policy rate has moved up to 0.75% with the same conditional guidance to 'continue to raise' rates while real rates remain very low, and internal pressure has escalated with Takata now dissenting for 1.0% instead of 0.75%, though the Governor tempers this by calling risks balanced and refusing to treat April as decisive.
Balance Sheet — Little changed. A new balance-sheet theme appears that was absent from the prior signal set — unstable super-long JGB supply-demand and readiness for flexible operations — but it is framed as watch-and-coordinate monitoring with no operational action.

Key wording

30 October 2025

At today's meeting, first, we decided by a majority vote to maintain the monetary market operation guideline of encouraging the uncollateralized overnight call rate to remain at around 0.5 percent.
rate path: BoJ held at 0.5%, as expected; no change to current policy stance.

Member Takata submitted a proposal to raise the policy interest rate to around 0.75 percent, stating that the norm of prices not rising has shifted and that the achievement of the price stability target has been broadly attained, and Member Tamura also submitted a proposal to raise the policy rate to around 0.75 percent, stating that, with upside risks to prices expanding, it is appropriate to move somewhat closer to the neutral interest rate; however, both proposals were rejected by a majority vote.
rate path: Two board members dissented for a 25bp hike, signaling internal pressure for near-term tightening.

Looking ahead, as the impact of rises in food prices such as rice diminishes, the year-on-year rate of change in the CPI excluding fresh food is likely to see its positive margin narrow to below 2 percent through the first half of the next fiscal year.
inflation: Projects inflation cooling below target in the near term, giving the BoJ room to wait.

Regarding the risk balance for the economic outlook, taking into account the impact of trade policies of various countries, downside risks are considered larger for fiscal 2026. The risk balance for the price outlook is broadly balanced between upside and downside, as in the previous Outlook Report.
rate path: Economic risks are skewed down, but price risks balanced; no strong signal for a near-term move.

Given that the current real interest rate is at an extremely low level, if the above economic and price outlook is realized, we think that, in line with improvements in economic activity and prices, the Bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation.
rate path: Explicitly guides further hikes if the outlook holds, keeping tightening bias intact.

Regarding Japan's consumer prices, developments so far have been along the lines of the baseline scenario, in which the impact of food price rises diminishes while the underlying rate of price increases rises moderately, and we do not recognize that concerns about falling behind the curve are currently increasing.
inflation: Sees inflation on track and no urgency to hike; pushes back on 'falling behind' narrative.

23 January 2026

At today's Monetary Policy Meeting, we decided by majority vote to maintain the guideline for money market operations of encouraging the uncollateralized call rate (overnight) to remain at around 0.75%. Member Takata proposed a motion to raise the policy interest rate to around 1.0%, on the grounds that the price stability target has been broadly achieved, the overseas economy is in a recovery phase, and the upside risks to domestic prices are high, but the motion was rejected by majority vote.
rate path: Hold at 0.75% but Takata's dissent for 1.0% signals live internal pressure to hike.

As for the balance of risks, we consider that the outlook for both economic activity and prices is broadly balanced on the upside and downside.
rate path: Balanced risk assessment reduces urgency for near-term policy adjustment.

Regarding prices, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is currently in the mid-2% range, 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: CPI in mid-2% range with wage pass-through keeps inflation above target, supporting hikes.

In conducting monetary policy, given that the current real interest rate is at a very low level, if the outlook for economic activity and prices 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 hiking bias with real rates very low; key for rates path.

However, based on the thinking as of December, we raised the policy interest rate because the possibility that the price outlook we had held up to that point would be realized had gradually increased.
rate path: Confirms the December hike rationale tied to rising probability of the price outlook, supporting a hawkish bias.

At present, we observe that firms' price- and wage-setting behavior has recently become more active, and under these circumstances, I would like to carefully monitor the possibility that the degree of pass-through to domestic prices and the degree of response of domestic prices to import prices may be increasing, and I would also like to pay attention to the possibility that domestic prices moving in this way may affect inflation expectations and thereby also affect underlying prices.
inflation: Highlights rising passthrough and more active wage/price setting, a risk that underlying inflation could strengthen.

Official documents

Background reading

30 October 2025 press conference · 23 January 2026 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology