The Bank of Japan published its Summary of Opinions from the January Monetary Policy Meeting, showing members judged the economy to be recovering moderately and underlying consumer price inflation to be rising toward a level generally consistent with the 2 percent price stability target. A number of views pointed to maintaining a path of policy interest rate increases to adjust the degree of monetary accommodation, citing significantly negative real interest rates and the risk that yen depreciation could keep inflation elevated. Members expected global growth to regain momentum, supported in part by robust IT and AI-related demand, while Japan’s real wage growth was projected to turn positive as energy and food inflation slows. On prices, opinions flagged closer monitoring of wage-to-price pass-through beyond food and services, rice and urban rent increases, and the growing influence of exchange rates on inflation, with some views arguing upside risks had increased due to labor supply constraints, fiscal demand and external supply factors. On policy operations, several opinions supported reducing Japanese government bond purchases in line with the current approach but retaining flexibility to respond to exceptional circumstances, amid concerns about a recent one-sided steepening of the yield curve and higher volatility in super-long-term JGB markets.
Bank of Japan 2026-02-02
Bank of Japan summary of opinions highlights case for further rate hikes and scaled-back JGB purchases
The Bank of Japan's January Monetary Policy Meeting Summary indicates a moderate economic recovery and rising inflation towards the 2% target. Members considered interest rate increases due to negative real interest rates and yen depreciation risks. They emphasized monitoring wage-to-price pass-through and exchange rate impacts on inflation, while supporting reduced government bond purchases with flexibility for exceptional circumstances amid yield curve concerns.