In its July meeting, the Bank of Japan opted to maintain its benchmark short-term interest rate at 0.5%, sustaining borrowing costs at their peak since 2008 and aligning with market forecasts. This unanimous decision underscores the central bank's cautious stance on policy normalization. This development occurred shortly after the U.S. Federal Reserve decided to keep its rates unchanged for the fifth consecutive session, despite President Trump's calls for a reduction. In its quarterly report, the Bank of Japan adjusted its core inflation forecast for the fiscal year 2025 to 2.7%, up from 2.2%, with projections suggesting a decrease to approximately 1.8% in fiscal year 2026 before a slight increase to 2.0% in fiscal year 2027. Simultaneously, the GDP growth forecast for fiscal year 2025 was marginally adjusted to 0.6% from 0.5% as projected in April, while the forecast for fiscal year 2026 remained steady at 0.7%.