The Bank of Japan is reported to have made its first determination that underlying inflation had reached 2%, and indicated a policy of leaving the policy rate unchanged while accelerating ETF sales.
At its monetary policy meeting on the 30th, the Bank of Japan judged that underlying inflation had reached around 2% for the first time since the target was set in 2013. In response, it decided by a majority vote of 8 in favor and 1 against to leave the policy rate unchanged at around 1.25%.
In its new Outlook for Economic Activity and Prices report, the Bank of Japan raised its assessment, stating that underlying inflation had reached a level broadly consistent with the 2% price stability target. It had previously said that inflation was “approaching 2%.”
This assessment indicates the Bank of Japan’s policy of pursuing sustained price increases, and attention will focus on the continuity of monetary policy operations going forward.