Policy Rate Maintenance Decision
The Bank of Japan decided at the September 19, 2025 Monetary Policy Meeting to maintain the uncollateralized overnight call rate at around 0.5% with a vote of 7 in favor and 2 against. Board members Takada and Tamura, who voted against, argued for a raise to 0.75% citing upside risks to prices and approaching the neutral rate, but were defeated by majority opposition.
Current Assessment of Economic and Price Conditions
Economic Assessment: While showing some weakness in parts, the economy is recovering gradually Price Trends: Consumer prices (excluding fresh food) are currently in the upper 2% range due to continued wage increases passing through to selling prices and rising prices of food items such as rice
Corporate Sector: Manufacturing shows downward pressure from tariffs, but maintains high levels overall. Capital investment shows a gradual increasing trend
ETF and J-REIT Disposal Policy Decision
The Bank of Japan unanimously decided to market-sell held ETFs and J-REITs. The sale scale is set to be comparable to the sale of "stocks purchased from financial institutions," with the sale proportion relative to overall market trading value set at approximately 0.05%.
Specific Sale Pace:
- ETF: Approximately 330 billion yen annually (book value basis, approximately 620 billion yen in market value)
- J-REIT: Approximately 5 billion yen annually (book value basis, approximately 5.5 billion yen in market value)
Future Policy Outlook and Risk Factors
The overseas economy is expected to decelerate under the influence of trade policies and other factors in various countries, with corporate profits also being pressured downward, leading to an expected slowdown in growth pace. Subsequently, growth rates are expected to increase as overseas economies gradually return to growth paths. Major risk factors include the high uncertainty surrounding future developments in trade policies of various countries and their impacts on overseas economic and price trends, requiring sufficient attention to effects on financial and foreign exchange markets.