At its October meeting, the BOJ left the policy rate unchanged at 1.25% and judged that underlying inflation was broadly consistent with the price stability target. It revised its growth and inflation outlook in the Outlook Report and announced an accelerated pace of ETF sales. Governor Ueda (植田), meanwhile, pointed to funding risks for small and medium-sized enterprises and said that the BOJ would remain mindful of excessive tightening.
The BOJ held a Monetary Policy Meeting from 29 to 30 October and left the target for the uncollateralized overnight call rate unchanged at 1.25%. The vote was 8 in favor and 1 against, with Board Member Takata (高田) casting the sole dissenting vote.
In the Outlook Report, the BOJ revised its forecast for real GDP growth in FY2026 up from the previous forecast of 0.6% to 0.7%, while leaving its forecast for the Consumer Price Index (CPI) in FY2026 unchanged at an increase of 2.5%. The inflation forecast for FY2027 was revised up.
The meeting materials explicitly stated that underlying inflation was at a level consistent with the inflation target and used wording that stressed the need to take account of upside risks to prices. In light of changes in conditions noted at the press conference following the previous meeting, the materials set out points to note in the conduct of monetary policy going forward.
The BOJ announced a policy of increasing the pace of ETF sales while limiting the impact on the stock market. It provided an estimate raising annual sales from approximately ¥330 billion to approximately ¥860 billion (book value), shortening the estimated time to complete the sales from approximately 112 years to approximately 43 years.