While the BOJ has signaled an additional rate hike, the inflation rate in August 2026 is falling below 2%, even as consumers feel that gyudon and coffee have become substantially more expensive. The relationship between future price trends and the BOJ's rate-hike policy is examined.
Ahead of the BOJ's October monetary policy meeting, Governor Ueda said at a press conference that the BOJ would continue raising rates while bringing inflation closer to 2%, as it could not accept further increases. At the previous meeting in September, the policy rate was raised from 1.00% to 1.25%, and the market shares the view that gradual rate hikes will continue.
Current prices differ in that the level is high and the rate of increase is high. The year-on-year increase in the all-items consumer price index in August 2026 was 1.9%, while the all-items index excluding fresh food rose 1.7%, both below 2%. Food prices rose 3.2%, dining out 2.1%, energy fell 0.7%, and rice fell 15.7%, according to reports.
From 2020 to 2026, gyudon prices rose 1.311 times, Starbucks prices 1.301 times, Yoshinoya gyudon prices 1.311 times and Doutor prices 1.339 times, increases of nearly 30%. These increases in the prices of individual products are cited as a factor strongly affecting perceptions of everyday living despite the decline in the inflation rate.
The ESP Forecast projects 2.25% for fiscal 2026, 1.31% for fiscal 2027 and 1.91% for fiscal 2028, indicating that inflation is expected to remain low. Depending on the impact of yen depreciation and price trends, the need for further rate hikes is again being questioned.