BoJ Summary of Opinions: Member says uncertainty surrounding economy, price outlook is high
The Bank of Japan (BoJ) published the Summary of Opinions from the monetary policy meeting on April 30 and May 1, 2025, with the key findings noted below.
Key quotes
One member said BOJ is likely to keep raising interest rates in accordance with improvements in the economy, prices.
One member said no change to BOJ’s rate-hike stance as real interest rates are deeply negative, but must scrutinise risks.
One member said uncertainty surrounding economy, price outlook high, likelihood of achieving price goal not as high as in past.
One member said BoJ has little choice but to take wait-and-see stance until developments surrounding U.S. trade policy stabilise to some extent.
One member said BoJ will enter a temporary pause in rate hikes but shouldn’t slide into excessive pessimism, must guide policy nimbly and flexibly.
One member said the chance of Japan’s underlying inflation faltering is small.
One member said US trade policy development could turn positive or negative any time, which means BOJ’s policy path could change any time as well.
One member said our projections have been severely jolted by US trade policy with higher US tariffs likely to weigh on Japan’s economy, prices.
Market reaction
Following the BoJ’s Summary of Opinions, the USD/JPY pair is down 0.07% on the day to trade at 148.20 as of writing.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.