--- source: Bank of Japan url: https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k260319a.pdf document_type: pdf date_retrieved: 2026-03-19 date_released: 2026-03-19 period: March 19, 2026 Monetary Policy Meeting parent_publication: Monetary Policy Decision indicators_covered: [Interest Rate Decision, Policy Rate, Inflation Outlook, Economic Outlook] --- # Statement on Monetary Policy ## Bank of Japan — March 19, 2026 ### Monetary Policy Decision At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by an 8-1 majority vote, to set the following guideline for money market operations for the intermeeting period: **The Bank will encourage the uncollateralized overnight call rate to remain at around 0.75 percent.** ### Voting Details - **Vote in favour:** 8 members (Ueda Kazuo, Himino Ryozo, Uchida Shinichi, Noguchi Asahi, Nakagawa Junko, Tamura Naoki, Koeda Junko, and Masu Kazuyuki) - **Vote against:** 1 member (Takata Hajime) - **Dissenting proposal:** Takata proposed setting the guideline to around 1.0 percent, citing that the price stability target has been more or less achieved and that risks to prices are skewed to the upside due to second-round effects of overseas price rises. --- ## Economic Assessment ### Current Economic Conditions Japan's economy has recovered moderately, although some weakness has been seen in part. Key developments: - **Overseas economies:** Have grown moderately on the whole, although some weakness has been observed, reflecting trade and other policies in each jurisdiction. - **Exports and industrial production:** Have continued to be more or less flat as a trend. - **Corporate profits:** Remained at high levels on the whole, although downward effects due to tariffs have been seen in manufacturing. - **Business fixed investment:** On a moderate increasing trend. - **Private consumption:** Resilient against the background of an improvement in the employment and income situation, although affected by price rises. - **Housing investment:** On a declining trend. - **Public investment:** Continued to be more or less flat. - **Financial conditions:** Accommodative. ### Price Developments On the price front, with moves to pass on wage increases to selling prices continuing, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) had been above 2 percent, partly due to the effects of the rise in food prices, such as rice prices. However, the rate of increase has recently fallen to around 2 percent due to factors such as the effects of the government's measures to reduce the household burden of higher energy prices. **Inflation expectations have risen moderately.** ### Key Risk Factors In the wake of increased tension over the situation in the Middle East, global financial and capital markets have been volatile and **crude oil prices have risen significantly**. Future developments warrant attention. --- ## Economic and Price Outlook ### Medium-Term Outlook Japan's economy is likely to continue growing moderately, with: - Overseas economies returning to a growth path - A virtuous cycle from income to spending gradually intensifying - Support from government economic measures and accommodative financial conditions - Impact from trade and other policies in each jurisdiction **However:** The economy faces headwinds from trade policy developments and elevated crude oil prices resulting from Middle East tensions. ### Inflation Outlook The year-on-year rate of increase in CPI (all items less fresh food) is likely to: 1. **Temporarily decelerate** to a level below 2 percent, due to: - Waning effects of the rise in food prices (such as rice prices) - Effects of government measures to address rising prices 2. **Come under upward pressure,** affected by the recent rise in crude oil prices 3. **Maintain moderate wage-price interaction:** The mechanism in which wages and prices rise moderately in interaction with each other is likely to be maintained. ### Medium- to Long-Term Expectations - A sense of labor shortage will grow as the economy continues to improve - Medium- to long-term inflation expectations will rise - **Underlying CPI inflation is expected to increase gradually** and, in the second half of the projection period of the January 2026 Outlook for Economic Activity and Prices, be at a level that is generally consistent with the 2 percent price stability target - Attention should be paid to the impact of the rise in crude oil prices on the outlook for underlying CPI inflation ### Key Risks to Outlook The following risks require due attention: - Future course of the situation in the Middle East and developments in crude oil prices - Developments in overseas economic activity and prices under the impact of trade and other policies - Wage- and price-setting behavior of firms - Developments in financial and foreign exchange markets --- ## Monetary Policy Stance ### Forward Guidance As for the conduct of monetary policy, given that **real interest rates are at significantly low levels**, if the outlook for economic activity and prices presented in the January Outlook Report will be realized, the Bank, in accordance with improvement in economic activity and prices, **will continue to raise the policy interest rate and adjust the degree of monetary accommodation.** ### Policy Principles With the price stability target of 2 percent, the Bank will conduct monetary policy as appropriate, in response to: - Developments in economic activity and prices - Financial conditions - Perspective of sustainable and stable achievement of the 2 percent target --- ## Dissenting Opinions ### Takata Hajime (Voting Against) Takata opposed the decision, proposing a rate of 1.0 percent instead. His rationale: - The price stability target of 2 percent has been more or less achieved - Risks to prices in Japan are skewed to the upside due to second-round effects of price rises stemming from overseas developments Takata also opposed the description regarding the outlook for prices, considering that the level of CPI increase, including underlying CPI inflation, has already generally reached the price stability target. ### Tamura Naoki (Partial Opposition on Language) Tamura opposed the description regarding the outlook for underlying CPI inflation, considering that underlying CPI inflation was likely to be at a level generally consistent with the price stability target from the beginning of fiscal 2026 (not later in the projection period). --- ## Meeting Details | Item | Details | |------|---------| | **Meeting dates** | Wednesday, March 18: 14:00-15:53; Thursday, March 19: 9:00-11:39 | | **Statement release** | Thursday, March 19 at 11:46 JST | | **Summary of Opinions** | Monday, March 30 at 8:50 JST | | **Meeting Minutes** | Thursday, May 7 at 8:50 JST | ### Policy Board Members Present - **UEDA Kazuo** (Chairman/Governor) - **HIMINO Ryozo** (Deputy Governor) - **UCHIDA Shinichi** (Deputy Governor) — via conference call - **NOGUCHI Asahi** - **NAKAGAWA Junko** - **TAKATA Hajime** - **TAMURA Naoki** - **KOEDA Junko** - **MASU Kazuyuki** ### Government Representatives Present **March 18:** - MAEDA Tsutomu (Deputy Vice-Minister for Policy Planning and Coordination, Ministry of Finance) — 14:00-15:53 **March 19:** - MAEDA Tsutomu (Ministry of Finance) — 9:00-11:24, 11:31-11:39 - MIZUTA Yutaka (Deputy Director General for Economic and Fiscal Management, Cabinet Office) — 9:00-9:44 - KIUCHI Minoru (Minister of State for Economic and Fiscal Policy, Cabinet Office) — 9:45-11:24, 11:31-11:39 --- ## Key Takeaways 1. **Rate held at 0.75%** with 8-1 vote; dissent proposed 1.0% citing achieved price stability target and upside risks 2. **Forward guidance:** BoJ will continue raising rates in line with economic and price improvements, with real rates currently at "significantly low levels" 3. **Economic outlook:** Moderate growth expected, supported by policy measures, but trade tensions and elevated crude oil prices pose risks 4. **Inflation path:** Expected to temporarily dip below 2% (from food price waning), then rise due to crude oil impacts, ultimately reaching 2% target in H2 of projection period 5. **Medium-term:** Labor shortage and inflation expectations expected to rise as recovery deepens 6. **Risks highlighted:** Middle East tensions, crude oil volatility, overseas policy developments, wage/price dynamics