The Bank of Japan is highly likely to publicly indicate at its meeting on the 29th and 30th that underlying inflation has reached 2%. It is also expected to defer a policy rate hike and shift toward policy management aimed at achieving stable 2% inflation.
The Bank of Japan is reported to have settled on leaving interest rates unchanged at its monetary policy meeting on the 29th and 30th, and is highly likely to indicate that underlying inflation has reached the 2% price stability target.
In revising its Outlook Report, the BOJ is expected to assess whether underlying inflation has been confirmed in actual conditions and to set out the direction of policy in a manner consistent with its outlook for the future.
The BOJ has pursued its inflation target for many years, but with underlying inflation reaching 2%, it is approaching a turning point at which policy will shift from an emphasis on boosting inflation toward securing stability.
The focus in the market will be on the BOJ’s messaging at subsequent meetings, with attention on the market’s response to its policy stance.