The Bank of Japan softened its language regarding trade uncertainties, without clearly indicating the timing of interest rate hikes.

Jin10 data reported on July 31st that the Bank of Japan's decision to keep interest rates unchanged aligns with market expectations. The Bank of Japan raised its median forecast for core inflation for the current fiscal year in its quarterly economic outlook report, mainly reflecting the ongoing pressure from rising food prices. At the same time, the bank slightly increased its inflation expectations for fiscal years 2026 and 2027 and slightly raised its forecast for economic growth for the current fiscal year. Previously, the Fed had also announced to maintain interest rates unchanged, and Chairman Powell's remarks dropped market expectations for a rate cut in September, making the policy direction of major global central banks a focus once again. The Bank of Japan's decision-makers did not explicitly indicate a timetable for future interest rate hikes at this meeting. Officials believe that more time is needed to observe how U.S. tariffs will affect the Japanese economy and global trade patterns. However, the Bank of Japan softened its description of trade uncertainties in the outlook report summary and reiterated its intention to raise interest rates when conditions permit.