The Bank of Japan kept its short-term policy rate steady at 0.5% after a unanimous board vote on Thursday, opting to pause while it assesses the impact of U.S. trade measures and domestic price pressures. Governor Kazuo Ueda reiterated that future moves will depend on incoming data but left the door open to further tightening later this year. In its quarterly outlook, the central bank upgraded its core consumer-price projections across the board, lifting the forecast for the current fiscal year to 2.7% from 2.2% and projecting 1.8% inflation for FY 2026 and 2.0% for FY 2027. The policy statement said risks to prices are now "roughly balanced," a shift from May’s view that they were tilted to the downside, reflecting firmer wage gains and higher food costs. Financial markets interpreted the higher inflation path as keeping alive prospects for another rate increase, with several analysts pinpointing the October meeting as a potential window. The yen strengthened to about ¥148.6 per dollar and the five-year Japanese government bond yield ticked up to roughly 1.105% following the announcement.