In brief
The Bank of Japan (BOJ) left its key policy rate at about 1.25% after earlier raising it to a 31‑year high. BOJ officials said underlying inflation has "generally" reached the 2% target and that future policy will focus on anchoring inflation. The central bank will monitor global price pressures and may hike rates again before its next meeting in mid‑December.
On Thursday, October 30, Tokyo’s Bank of Japan (BOJ) held its benchmark interest rate at roughly 1.25%, the highest level in 31 years, after a two‑day policy meeting in Tokyo. The decision followed a September 0.25‑percentage‑point increase to the same 1.25% level, the central bank’s most recent adjustment in a decade.
In a quarterly economic outlook report released after the meeting, the BOJ said that underlying inflation has "generally" met its 2 percent price‑stability target, a goal it set nearly 14 years ago as part of efforts to end a long period of deflation.
BOJ Governor Kazuo Ueda said the bank’s monetary policy will increasingly focus on keeping underlying inflation firmly anchored around 2 percent.
"The BOJ’s monetary policy will increasingly focus on keeping underlying inflation firmly anchored around 2 percent," said Ueda at the post‑meeting press conference.
The BOJ cited higher prices for crude oil, semiconductors and other commodities, as well as a continued depreciation of the yen, as the main forces pushing up prices. It will closely monitor the impact of Middle Eastern events, global demand for artificial intelligence products, and foreign‑exchange movements on Japan’s economy and inflation.
In the same outlook release, the BOJ lifted its core consumer‑price inflation forecast for fiscal 2027 to 2.6 percent from 2.4 percent, while trimming its real GDP growth projection to 0.7 percent from 0.8 percent.
Upcoming Meeting
The BOJ is scheduled to meet again on December 17‑18, a date at which markets increasingly expect another rate hike.
