At next week’s monetary policy meeting, beginning on the 29th, the Bank of Japan is highly likely to judge that the underlying inflation rate has reached 2%, while an additional rate hike is expected to be held off.
The Bank of Japan is scheduled to hold a monetary policy meeting from the 29th to the 30th next week, with the focus expected to be on whether the underlying inflation rate it considers important will stabilize around 2%. More attention is expected to be paid to its assessment of future price trends based on the Outlook Report than to any policy change at this meeting.
The BOJ decided to raise rates in September and has only just lifted its policy rate to 1.25%, and discussions at this meeting are reportedly moving toward holding off on an additional rate hike. In light of the effects of its previous accommodative measures and price trends, the BOJ is expected to maintain its policy of keeping inflation stable without allowing it to rise significantly above 2%.
The focus of the meeting will be whether the underlying inflation rate, excluding temporary factors such as the government’s measures to address rising prices, will stabilize at around 2%. The contents of the Outlook Report, which is expected to indicate the BOJ’s view on this point, are attracting attention among market participants. Higher crude oil prices, a weaker yen and strong AI demand have been cited as factors pushing up prices.