The Bank of Japan is holding a Monetary Policy Meeting and is expected to indicate that underlying inflation has reached close to 2%. Meanwhile, the policy rate is expected to remain unchanged, with policy aimed at establishing inflation around that level going forward.
The Bank of Japan is expected to indicate that underlying inflation has effectively reached 2% at its Monetary Policy Meeting. Those involved remain cautious, viewing this as 'only having reached the starting line,' while external factors are reportedly continuing to push prices higher.
The policy rate is expected to remain unchanged at this meeting as the BOJ assesses the impact of last month's rate hike. Meanwhile, policies aimed at raising prices are entering a new phase, and the BOJ is indicating that it intends to respond through rate hikes for the time being.
The BOJ has long maintained a 2% price stability target, and the challenge will be how to establish inflation that has been pushed higher than expected by external factors. Establishing inflation around 2% is expected to be the focus going forward.