The Bank of Japan’s October meeting will be reviewed, focusing on the expected decision to leave the policy rate unchanged, the forecasts in the Outlook Report, the key points in Governor Ueda’s remarks and the outlook for future rate hikes. The BOJ is expected to maintain its current interest-rate guidance target, while the possibility of hawkish policy board members submitting proposals and the assessment of whether the price stability target has been reached are expected to be key issues.
The Bank of Japan is scheduled to hold a Monetary Policy Meeting on 29 and 30 October and is expected to leave unchanged its guidance target for the uncollateralized overnight call rate, its policy rate. Following the rate hike decided at the previous meeting, the BOJ is expected to continue taking a cautious approach to assessing the impact on the economy and prices.
The key focus this time will be whether the underlying inflation rate has reached the 2% target. Reports indicate that the question of whether to judge the target to have been reached is expected to be discussed in detail in the Outlook Report and at Governor Ueda’s press conference.
The Outlook Report is likely to include an upward revision to the core CPI forecast, reflecting the possibility that the assumed crude oil price will be revised higher. Attention will focus in Governor Ueda’s remarks on the process behind the assessment that the target has been reached, current assessments of the situation in the Middle East, AI demand and foreign exchange rates, and the financial environment. Market views are increasingly that discussions from the next meeting onward could provide clues to a December rate hike.