Japan Economic Flash: BOJ July MPM Preview: We Expect Status Quo in July, and Maintain View on Roughly Semi-annual Rate Hikes

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Japan Economic Flash: BOJ July MPM Preview: We Expect Status Quo in July, and Maintain View on Roughly Semi-annual Rate Hikes

Economics Research

23 July 2026 | 10:12AM JST

Japan Economic Flash: BOJ July MPM Preview: We Expect Status Quo in

July, and Maintain View on Roughly Semi-annual Rate Hikes

n The Japanese economy is recovering moderately in line with the BOJ’s outlook. Akira Otani

+81(3)4587-9960 | akira.otani@gs.com

Although price trends are currently somewhat weak, we expect rising upstream Goldman Sachs Japan Co., Ltd.

costs to spill over to consumer prices going forward. Under these circumstances,

in its July Outlook Report, we believe the BOJ is likely to maintain its broad

scenario that the economy will continue to grow moderately albeit at a

decelerated rate, and that CPI inflation will increase due to higher crude oil

prices, but will subsequently decline as the impact of higher crude oil prices

wanes.

n However, with crude oil prices lower than when the April Outlook Report was

published, we expect the BOJ to raise its growth forecasts and lower its price

forecasts slightly in the July Outlook Report.

n We believe the BOJ will maintain the status quo at the July meeting, and continue

to expect the next rate hike in January next year. However, the timing of rate

hikes is likely to be significantly influenced by market developments and the

degree of progress in communication with the government.

The Japanese economy is recovering moderately in line with the BOJ’s outlook.

Although price trends are currently somewhat weak, we expect rising upstream

costs to spill over to consumer prices going forward.

To date, recent economic indicators have generally trended in line with the BOJ’s

outlook.