Bank of Japan increases economic outlook before snap election, keeps interest rates steady at 0.75%

Bank of Japan Revises Growth Projections, Maintains Interest Rate

The Bank of Japan announced on Friday that it has increased its economic growth projections, while keeping its main policy interest rate unchanged at 0.75%. This decision comes as the nation approaches an upcoming election.

For the fiscal year ending March 2026, the central bank now anticipates economic growth of 0.9%, up from its previous estimate of 0.7% for October 2025. Additionally, the GDP growth forecast for the 2026 fiscal year has been raised to 1%, compared to the earlier projection of 0.7%.

The decision to maintain the benchmark rate was reached by an 8-1 majority, following last December’s rate hike to a three-decade high. This move precedes anticipated snap elections, where Prime Minister Sanae Takaichi may intensify her support for monetary policy adjustments.