The Bank of Japan indicated that it is expected to determine that inflation has reached 2%, raising the likelihood that the country will achieve its goal of exiting deflation after nearly 14 years. The policy rate is widely expected to remain unchanged at the next meeting, according to reports.
The Bank of Japan held the second day of its monetary policy meeting on this day and indicated that it is expected to determine that inflation has reached around 2% annually, without being driven by temporary factors. Approximately 14 years have passed since the goal of exiting deflation was established, and the Bank is organizing the factors relevant to achieving it.
The current policy rate, at around 1.25%, is widely expected to remain unchanged, with the Bank likely to maintain the rate level it decided to raise at its previous meeting. As price increases driven by external factors may continue to have an impact, it was noted that continued wage increases are essential to creating a virtuous economic cycle.
Market expectations are growing that the Bank will proceed with another rate hike at its next meeting in December. The Bank of Japan is moving ahead with tightening to contain inflation, and the future conduct of monetary policy is attracting attention.