The Bank of Japan announced at its monetary policy meeting that it had judged underlying inflation to have reached 2% and decided to leave the policy rate unchanged at approximately 1.25%.
At this monetary policy meeting, the Bank of Japan announced that it had judged underlying inflation to have reached 2%, the "price stability target." The target was introduced in 2013, meaning it has been reached after more than 13 years. The rate will remain at approximately the current level of 1.25%.
The Outlook report assessed underlying inflation as having reached a level broadly consistent with the "price stability target." The wording on timing included in the statement after the previous meeting was deleted.
The Bank of Japan is expected to shift its policy focus toward stabilizing underlying inflation at approximately 2% through rate hikes, using multiple economic indicators to assess price trends on a sustained basis. While assessing the effects of accommodative measures aimed at achieving the 2% target, it will continue to maintain a policy direction of reducing the degree of monetary accommodation.
Market attention will shift to the Bank's future pace of rate hikes and the wording of its statement. The decision has been reported as reflecting the need to assess the effects of the September rate hike and the findings of the Outlook report.