BOJ Lifts Economic Outlook Following US-Japan Trade Agreement

The Bank of Japan (BOJ) has maintained its interest rate at 0.5% while adopting a more optimistic view on the economic outlook, following a new trade agreement between Tokyo and Washington that alleviated some uncertainty. In its quarterly report, the BOJ revised its core inflation forecast for the fiscal year upward to 2.7% from 2.2%, with risks to the price outlook now described as “roughly balanced”—a notable shift from its previously cautious tone. While acknowledging lingering uncertainty over global trade, the central bank offered a less downbeat assessment than in May. Market observers are now watching Governor Kazuo Ueda closely for signals on a potential rate hike later this year, as Japan faces rising food prices and external economic pressures.