Market Speak: BOJ stays dovish, unveils cautious bond taper amid inflation risks

The summary of opinions from its June Monetary Policy Meeting showed that the Bank of Japan is maintaining a cautious stance, with any future rate hikes dependent on how inflation and economic growth evolve. While prices have slightly exceeded expectations, the BOJ warned of weakening growth and sluggish CPI improvements. Despite inflationary pressure from surging rice prices, board members supported keeping policy accommodative to buffer against global uncertainties. The central bank announced a gradual bond taper starting April 2026, cutting JGB purchases by JPY 200 billion per month, but clarified this does not signal a policy shift. A review is scheduled for June 2026.

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