The Bank of Japan kept its policy rate at “around 0.5%” in September 2025 and confirmed plans to sell ETFs and J-REITs in line with its disposal principles, aiming to avoid market disruption.

• The decision passed by a 7–2 majority for the rate stance, while the vote on ETF and J-REIT sales was unanimous.

• Japan’s economy is recovering moderately, supported by resilient private consumption and solid corporate profits, though tariffs have weighed on manufacturing and exports.

• Business fixed investment continues to trend upward, while housing investment remains weak and public investment is largely flat.

• CPI (ex fresh food) is running between 2.5–3.0% YoY, driven by rising food costs and wage pass-through, while inflation expectations are edging higher.

• The BoJ expects growth to slow in the near term due to global trade policies and weaker overseas economies but to gradually improve later as external demand recovers.

• Underlying inflation is likely to soften in the near term before gradually rising, supported by labor shortages and higher inflation expectations, with CPI expected to align with the 2% target in the latter half of the projection period.

• Risks remain elevated, particularly around global trade and policy developments, which could significantly impact growth, prices, and financial markets.