Three sources familiar with the Bank of Japan’s thinking stated that the central bank is likely to hold its short-term policy rate steady at 1% at the policy meeting scheduled for July 30–31, while retaining guidance that further rate hikes remain on the table. The sources added that the BOJ may slightly upgrade its fiscal 2026 economic growth forecast in the quarterly report and cut its core inflation projection amid falling oil prices. Still, yen depreciation, rising wages and cost pressures driven by AI demand keep the bank alert to upside inflation risks.