The BOJ stated that underlying inflation had reached 2% for the first time and expressed the view that it would seek to anchor inflation near 2% going forward. It confirmed its policy of keeping the policy rate at 1.25%.
At its Monetary Policy Meeting held on 29–30 October, the BOJ left the policy rate unchanged at 1.25%, deciding by a majority vote of 8–1. Given that the meeting came immediately after the rate hike at the previous meeting, the outcome was regarded as in line with market expectations.
The Outlook for Economic Activity and Prices released at the same time stated that underlying inflation had reached a level broadly consistent with the BOJ’s 2% price stability target.
At a press conference following the meeting, Governor Kazuo Ueda (植田 和男) suggested that this assessment was shared unanimously by all policy board members, describing it as a consensus that included some of the board’s deliberative members.
The achievement of 2% underlying inflation was the first such occurrence since 2013. The report also included an analysis attributing it to supply constraints following the COVID-19 pandemic and the impact of energy and commodity prices. Going forward, the report identified the timely and appropriate conduct of monetary policy as a challenge in achieving stable anchoring near 2%.