The Bank of Japan was reported to have judged that the underlying inflation rate had reached 2%, while Nomura Securities maintained additional rate hikes in December as its base-case scenario. The article also includes commentary from Kyohei Morita (森田京平).
At its Monetary Policy Meeting held on 30 October, the Bank of Japan decided to leave its policy rate unchanged and accelerate the pace of ETF sales. The decision was in line with market expectations, avoiding consecutive rate hikes. Board Member Hajime Takata (高田創) opposed keeping rates unchanged, but the decision was approved by 8 votes to 1.
Following the release of the Outlook for Economic Activity and Prices, real GDP was revised upward for fiscal 2026 and downward for fiscal 2027. Although core CPI was revised upward for fiscal 2027, the overall framework for prices and the economy was said to have remained largely unchanged.
Following the policy meeting, Nomura Securities maintained its base-case scenario, including an additional rate hike in December. The terminal rate is expected to be approximately 1.75%, while three additional rate hikes in December 2026 and March 2027 are assumed as a risk scenario.
The Outlook for Economic Activity and Prices maintained its assessment that the underlying inflation rate would stabilize at around 2%, and judged that price risks were skewed significantly to the upside. These factors were said to potentially provide grounds for justifying a rate hike at the next meeting in December.