With the Bank of Japan expected to leave rates unchanged, the Outlook Report is reported to be likely to include an upward revision to its inflation forecast. The closely watched Bank of Japan meeting is nearing its results announcement around midday on the 30th.
The Bank of Japan's Monetary Policy Meeting decision will be announced around late morning on the 30th, followed by Governor Ueda's press conference at 3:30 p.m. The Bank of Japan has raised rates twice this year, in June and September. At the September meeting, a rate hike was decided by a 7–2 majority, and pricing in the short-term interest-rate market has shifted toward an unchanged decision.
The key focus this time is the Outlook for Economic Activity and Prices (Outlook Report), which is widely expected to indicate that underlying inflation has reached the 2% target. The report is expected to suggest that higher costs could continue to be passed through to prices into next year, and the inflation forecast for fiscal 2027 is expected to be raised.
The assumptions in the previous report in July started with Dubai crude at US$80 and forecast a decline to approximately US$70 toward the end of the period. By contrast, Dubai crude has recently risen to around US$110, which could support an upward revision to the inflation outlook.
The market is focused on the size of the revision. A modest increase is currently expected, but a larger-than-expected revision would strengthen expectations for another rate hike.