BOJ Statement on Monetary Policy

Japan's economic growth is likely to decelerate in fiscal 2026, since the rise in crude oil prices reflecting the impact of the situation in the Middle East is expected to push down corporate profits and households' real income through factors such as a deterioration in the terms of trade. However, the economy is expected to continue growing moderately, albeit at a decelerated rate, since it is likely to be underpinned by factors such as the government's various measures and accommodative financial conditions, in addition to developments such as continued high levels of profits in the corporate sector. Japan's economic growth rate is likely to rise moderately from fiscal 2027 onward, since it is projected that the adverse effects of high crude oil prices will wane and that a virtuous cycle from income to spending will gradually intensify. Just in | BOJ Forecasts Reduced Impact of High Crude Oil Prices Starting Fiscal 2027 Just in | BOJ Projects Core-Core CPI to Reach 2.2% by Fiscal 2028 Just in | BOJ Warns Prolonged High Crude Oil Prices Could Further Slow Economy Amid Falling Corporate Profits and Real Income. Just in | BOJ Warns: Major Supply Chain Disruptions Could Impact Japanese Production Activities.