{"id":669539,"date":"2026-10-30T04:56:09","date_gmt":"2026-10-30T04:56:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/669539\/"},"modified":"2026-10-30T04:56:09","modified_gmt":"2026-10-30T04:56:09","slug":"boj-holds-rates-at-1-25-says-inflation-target-has-been-met","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/669539\/","title":{"rendered":"BOJ holds rates at 1.25%, says inflation target has been met"},"content":{"rendered":"

The Bank of Japan declared that underlying inflation in the country was “generally consistent”<\/a> with its target of 2%, the first time it has made that assessment since adopting the target in 2013.<\/p>\n

Before this, the BOJ used to say<\/a> that underlying inflation has been “approaching 2 percent.”<\/p>\n

This comes as the central bank expectedly held rates<\/a> at 1.25%, still at its highest level since 1995.<\/p>\n

The decision was split 8-1, with board member Hajime Takata dissenting. Takata had wanted the bank to hike its policy rate to 1.5%. <\/p>\n

The BOJ also upgraded its inflation forecast for its fiscal year 2027 to 2.6% from 2.4%, with the so-called “core-core” inflation forecast also raised to 2.7% from 2.6%. The “core-core” inflation strips out prices of fresh food and energy. <\/p>\n

It also flagged a risk that underlying inflation will deviate upward beyond 2%, saying that “firms’ behavior has been shifting more toward raising wages and prices and there are various factors that could drive up prices.”<\/p>\n

Describing this as a “hawkish hold,” Krishna Bhimavarapu, APAC economist at State Street Investment Management said that the BOJ sees more hikes ahead and is increasingly confident that the target is being achieved through a “self-sustaining wage-price-consumption cycle.”<\/p>\n

However, he also added that growth in the country does not justify rushing the next move. <\/p>\n

Bhimavarapu forecasts that Japan’s third quarter GDP growth is likely to lose momentum, with consumption still the weakest link in the cycle.<\/p>\n

A CNBC survey of 16 economists before the decision revealed that all surveyed expect the BOJ to set the stage for a rate hike in December or January next year, as domestic inflation and wages continue to rise.<\/p>\n

Thirteen respondents said they expect a terminal rate, or the level at which the BOJ is expected to stop its tightening cycle, of 1.75% to 2% by around mid-2027.<\/p>\n

Japan has been grappling with a weak yen and high energy prices that have pushed up inflation. <\/p>\n

However, experts have told CNBC that CPI numbers are being held down by energy subsidies from the Takaichi administration. <\/p>\n

The most recent inflation numbers for September revealed core inflation hit their highest level<\/a> in 2026, coming in at 2.1% and overshooting expectations. <\/p>\n

Earlier this month, Finance Minister Satsuki Katayama reportedly told parliament<\/a> that Japan was “on the cusp of shifting to a period of sustained inflation driven by rising wages.”<\/p>\n

Japan’s inflation-adjusted wages rose<\/a> for the eighth month in a row in August, climbing 1.5% from a year earlier, according to the most recent government data, signaling potential wage-growth-driven inflation as well.<\/p>\n

\u2014 CNBC’s Lisa Kim contributed to this report. <\/p>\n","protected":false},"excerpt":{"rendered":"The Bank of Japan declared that underlying inflation in the country was “generally consistent” with its target of…\n","protected":false},"author":2,"featured_media":669540,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[4635,2476,11237,72,122,11236,113,61,60,582,10684],"class_list":["post-669539","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-asia-economy","tag-breaking-news","tag-breaking-news-asia","tag-business","tag-business-news","tag-central-banking","tag-economy","tag-ie","tag-ireland","tag-japan","tag-prices"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/669539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=669539"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/669539\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/669540"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=669539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=669539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=669539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}