In its Outlook for Economic Activity and Prices (October 2026), the BOJ judged that underlying inflation had reached a level consistent with its 2% target. It took approximately 14 years to reach the target after it was set.
The Bank of Japan is considered to have completed its long-term effort to achieve its 2% price stability target. The target was set in January 2013 and reached in October 2026, taking just under 14 years.
Quantitative and qualitative monetary easing (QQE) was initially intended to achieve the target in about 2 years through a substantial expansion of the money supply. However, inflation did not rise sufficiently, and the negative interest rate policy and YCC were introduced in 2016.
The focus of monetary easing shifted from the quantity of money to interest-rate control. Rising overseas interest rates and yen depreciation pushed up import prices, affecting domestic prices as well.
One lesson from this experience is that once the policy rate reaches its lower bound, efforts to escape low inflation may become less effective. Early action is considered important before deflation or low inflation becomes entrenched.
Going forward, policy management is expected to combine monetary tightening with fiscal consolidation while pursuing price stability and preparing for an economic downturn.