Future rate hikes to be implemented “when possible”; reference also made to raising rates toward the “neutral interest rate” ... BOJ’s October meeting, which judged inflation to have reached 2%: “Main opinions”

The story

The BOJ released the main opinions from its Monetary Policy Meeting held on 29–30 October. At the meeting, it judged that underlying inflation had reached 2%. Several members said that the BOJ should not be excessively cautious about future rate hikes and should implement them “when possible.”

Several members said that interest rates should be raised early toward the “neutral interest rate” level. Meanwhile, the neutral interest rate was estimated at approximately 1.1%–2.5%, while the current policy rate was approximately 1.25%. Some members expressed caution about raising rates too quickly.

At a press conference following the meeting, BOJ Governor Ueda Kazuo (植田和男) said that “it is important going forward to stabilize [rates] at around 2%,” indicating that the BOJ intends to proceed with rate hikes to address the risk of inflation exceeding 2%. Some members cited next spring’s annual wage negotiations as a point of focus.

The next Monetary Policy Meeting is scheduled for 17–18 December.

At a glance

Inflation targetUnderlying inflation judged to have reached 2%

Interest rate outlookNeutral interest rate estimated at approximately 1.1%–2.5%

Current interest ratePolicy rate currently approximately 1.25%

Meeting scheduleNext meeting scheduled for 17–18 December

Key pointOpinions divided on whether to raise rates early and when to do so

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