Bank of Japan Press conference comparison — 30 October 2025 vs 19 March 2026
This Bank of Japan press conference comparison covers 30 October 2025 and 19 March 2026. Overall, the newer document was more hawkish. Since October the Bank has lifted its policy rate to 0.75% and kept a clear conditional bias toward further tightening, with a firm start to spring wage talks and heightened sensitivity of prices to the yen and oil reinforcing that direction. The next move is, however, less time-bound than before: a new oil-driven risk scenario and lower confidence in the outlook argue for judging policy meeting by meeting, making the April outlook review and…
What changed
More hawkish. Since October the Bank has lifted its policy rate to 0.75% and kept a clear conditional bias toward further tightening, with a firm start to spring wage talks and heightened sensitivity of prices to the yen and oil reinforcing that direction. The next move is, however, less time-bound than before: a new oil-driven risk scenario and lower confidence in the outlook argue for judging policy meeting by meeting, making the April outlook review and any rewording of rate guidance the key checkpoints.
- Inflation — More hawkish. Inflation is still characterised as above 2%, but the current document adds explicit upside channels — stronger-than-past yen pass-through to underlying prices and oil-driven rises in medium-term inflation expectations — that were not present in October's more food-price-centric and dismissive framing.
- Labour Market — More hawkish. Wage talks have moved from 'insufficient material to state a forecast' to 'becoming a solid outcome', with only the spread of gains to smaller firms flagged as the remaining test, a clear upgrade that satisfies the condition the Bank set in October for its next move.
- Rate Path — More hawkish. The policy rate is now 0.75% versus 0.5% in October, the conditional commitment to continue raising rates is retained, and a hawkish dissent seeks 1.0%; new language also keeps a hike alive even if growth slows provided the hit to underlying inflation is temporary, though guidance stress that confidence in the outlook has 'declined somewhat' and that timing will be judged at each meeting makes the near-term path more conditional on the Middle East and oil.
- Balance Sheet — Little changed. Financial and asset-price conditions remain a monitoring input rather than a policy constraint in both documents, with no new signal on balance-sheet policy on either side.
Key wording
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 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.
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.
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.
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.
As for Japan's consumer prices, so far, while the effects of rising food prices are diminishing, prices have been moving in line with the central projection that the underlying rate of inflation will rise moderately, and we do not recognize that concern of falling behind the curve is currently increasing.
At today's meeting, the Policy Board decided by a majority vote to maintain the guideline for market operations of encouraging the uncollateralized overnight call rate to remain at around 0.75%.
In addition, Member Takata proposed a bill to raise the policy interest rate to around 1.0%, arguing that the price stability target has been broadly achieved and that the risk of domestic inflation overshooting is high due to second-round effects of overseas-originated price increases, but the proposal was rejected by a majority vote.
Regarding prices, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) has been running above 2%, reflecting the continued pass-through of wage increases to selling prices and the impact of rising food prices such as rice, but recently it has declined to around 2% due to the effects of the government's measures to ease the energy burden.
Risk factors surrounding the outlook include future developments in the Middle East situation and crude oil price movements, overseas economic and price developments affected by each country's trade policies, firms' wage and price-setting behavior, and financial and foreign exchange market developments, and it is necessary to pay sufficient attention to their impact on Japan's economy and prices.
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.
On the other hand, if rising crude oil prices or yen depreciation lead to increases in people's medium- to long-term inflation expectations, that is thought to act to push up the underlying rate of inflation. It is also necessary to bear in mind that such movements may be stronger than in the past — for example, compared with the time of import price increases after Russia's invasion of Ukraine — under circumstances where firms' wage and price-setting behavior is becoming more active.
Official documents
Background reading
Related
30 October 2025 press conference · 19 March 2026 press conference · Earlier meeting · Later meeting · Previous comparison · Next comparison · Methodology
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