Press Conference by BOJ Policy Board Member Sato

The press conference was held on June 30, 2026, and Policy Board Member Sato explained that he had only just taken office. He said he would carefully monitor the situation in the Middle East and the pass-through of crude oil prices to prices ahead of the next meeting.

Regarding price assessments, he indicated that multiple data sources would be considered comprehensively, including not only the latest consumer price index but also corporate prices and future inflation expectations. He said he would determine whether higher crude oil prices represented a temporary cost-push effect or sustained inflation transmitted through wages and expectations.

He explained that yen depreciation can increase the earnings of exporting companies and inbound tourism demand, while also reducing households' real income through higher import prices and increasing the burden on small and medium-sized enterprises.

He noted the possibility that exchange rate fluctuations could affect the underlying rate of price increases through expected inflation rates, and said it was necessary to assess exchange rate developments carefully.

He expressed the basic recognition that the division of roles between fiscal and monetary policy is important: monetary policy should focus on underlying price trends, while fiscal policy should primarily support households and companies affected by those trends. He said the specific policy combination would be determined according to economic conditions.

He did not conclude which was the greater risk, a downturn in economic activity or an upside surprise in inflation. He explained that the neutral interest rate and underlying inflation are based on estimates, so policy should be evaluated by considering other economic data comprehensively as well. Referring to Article 3 of the Bank of Japan Act, which establishes monetary policy independence, he said he placed importance on achieving the 2% target sustainably and stably.

He said that although Abenomics' large-scale easing had certain positive effects, such as improved employment and higher stock prices, the failure to achieve the 2% target set in January 2013 should be assessed negatively. He said the scale and pace of ETF sales would be considered in the future, taking into account the views of market participants and predictability.