The Bank of Japan is preparing to revise its growth outlook upward, and the timing matters more than the number itself. According to Reuters, BoJ sources expect the central bank to nudge its real GDP growth forecast for fiscal 2026 above the +0.5% projection it issued back in April. The updated figures are set to appear in the quarterly Outlook for Economic Activity and Prices, due July 31.
What is driving the revision
Two forces are doing most of the work here. First, demand tied to artificial intelligence infrastructure is proving stickier and stronger than the BoJ’s earlier models anticipated. Second, the yen. A weaker currency makes exports more competitive and inflates the yen-denominated revenues of multinationals, but it also pushes up the cost of imported goods. In this case, the BoJ’s sources suggest the cost-push effect is actually contributing to nominal growth readings, even as falling oil prices provide a partial offset.
The BoJ raised its policy rate by 25 basis points on June 16, bringing it to 1%.
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