Bank of Japan Press conference comparison — 19 March 2026 vs 28 April 2026

19 March 2026

At today's meeting, the Bank decided by a majority vote to maintain the guideline for money market operations, encouraging the uncollateralized overnight call rate to remain at around 0.75 percent.

Member Takata submitted a proposal to raise the policy interest rate to around 1.0 percent, arguing that the price stability target has largely been achieved and that the risk of an upside overshoot in domestic prices is high due to second-round effects of overseas-driven price increases; however, this proposal was rejected by a majority vote.

Looking ahead, as the effects of price increases in food items such as rice wane, and with the effects of the government's measures against high prices, the year-on-year rate of change in the CPI excluding fresh food is expected to first narrow its positive margin to a level below 2 percent, after which the effects of the recent rise in crude oil prices are expected to work in the direction of widening the positive margin.

Given that the current real interest rate is at an extremely low level, if the above economic and price outlook is realized, the Bank considers that it will continue to raise the policy interest rate and adjust the degree of monetary accommodation in response to improvements in economic and price conditions.

That is, if downward pressure is placed on the economy and the output gap deteriorates, that would be a factor pushing down the underlying rate of inflation. On the other hand, if the rise in crude oil prices and yen depreciation lead to rises in people's medium- to long-term inflation expectations, that would work to push up the underlying rate of inflation.

It is also necessary to note that, with firms' wage- and price-setting behavior becoming more proactive, such movements could be stronger than in the past -- for example, compared with the period after the rise in import prices following Russia's invasion of Ukraine.

28 April 2026

At today's Monetary Policy Meeting, we decided by majority vote to maintain the guideline for money market operations of encouraging the uncollateralized overnight call rate to remain at around 0.75 percent. Member Nakagawa, while noting uncertainty over the Middle East situation, judged that based on economic conditions, under accommodative financial conditions, the upside risk to prices is high; Member Takata judged that the price stability target has been broadly achieved and that the upside risk to domestic prices from second-round effects of overseas-originated price increases has already heightened; and Member Tamura, as upside risks to prices are expanding significantly, in order to move even slightly closer to the neutral interest rate, proposed a motion to raise the policy interest rate to around 1.0 percent; all three submitted this proposal, but it was rejected by majority vote.

As for the balance of risks, centered on fiscal 2026, downside risks are judged to be larger for the economic outlook, and upside risks are judged to be larger for the price outlook.

Looking ahead, as the pass-through of wage increases to selling prices continues, the rise in crude oil prices will act in the direction of pushing up prices, mainly for energy prices and goods prices, so fiscal 2026 is projected to be in the upper 2 percent range.

As the Bank of Japan, given that the underlying rate of inflation is approaching 2 percent and that the current real interest rate is at an extremely low level, we believe that it will continue to raise the policy interest rate and adjust the degree of monetary accommodation in accordance with economic activity, prices, and financial conditions.

On the price side, although the economic slowdown accompanying the Middle East situation acts in the direction of pushing down the underlying rate of inflation through deterioration in the output gap and other factors, on the whole, upside risks are considered to be larger.

That said, as I mentioned earlier, we are sufficiently aware of the risk that such an increase in headline inflation—to put it collectively—will push up underlying prices, and when assessing that risk, whether inflation expectations, which you mentioned in your second point, are anchored or not—currently, medium- to long-term inflation expectations vary considerably depending on which indicator one looks at, but they are approaching 2 percent, yet in the sense that they have not been moving around at 2 percent for a long time, they are not completely anchored.