At the July 31, 2025 meeting, the Bank of Japan maintained its interest rate at 0.5% and raised its core inflation forecast to 2.7% for fiscal year 2025.
Inflation Forecast for 2025
During the July 31, 2025 meeting, the Bank of Japan (BOJ) decided to keep the interest rate steady at 0.5% and adjusted its core inflation forecast to 2.7% for FY2025. This decision was unanimously supported by all nine members of the BOJ Policy Board.
Impact on Japanese Bonds and Global Markets
Immediately following the rate announcement, Japanese government bonds and JPY-denominated assets reacted to the news. The steady rate could influence cautious approaches in global equity markets, while cryptocurrencies like BTC and ETH may benefit from the BOJ's accommodative stance.
Support for Global Liquidity by BOJ
The BOJ has maintained steady rates for four meetings, recalling past periods when central bank policies supported global liquidity conditions. Historical data suggests that accommodative policies may lead to increased interest in risk assets.
The Bank of Japan's decision to maintain the interest rate at 0.5% and revise inflation forecasts for 2025 reflects a cautious approach to the current economic situation, which may have positive implications for global financial markets.
