At its policy meeting, the Bank of Japan kept the policy rate at 1.25%. In its statement, it judged that underlying inflation was broadly consistent with the 2% target, making the possibility of resuming rate hikes in December a market focus.
The Bank of Japan concluded its two-day monetary policy meeting and kept the policy rate at 1.25% by majority vote. The vote was 8–1, and reports following the meeting indicated that the policy direction remained unchanged.
For the first time, the Bank of Japan clearly indicated that Japan’s underlying inflation was broadly consistent with the 2% price stability target. This presented markets with the view that an early resumption of rate hikes could follow.
In its quarterly Outlook for Economic Activity and Prices, the Bank of Japan revised up its core CPI outlook and made a minor revision to its growth outlook. The policy stance indicated that it would monitor the situation for upside price risks while containing inflation.
The Bank of Japan accelerated the pace of sales of its ETF holdings and revised up its sales plan from 2027 onward. As a result, the expected period for completing the sale of its ETF holdings is now expected to be shorter than previously estimated.