At its Monetary Policy Meeting, the BOJ decided to leave the policy rate unchanged at 1.25%, while Governor Ueda indicated that underlying inflation had reached 2%. The BOJ plans to continue adjusting future rate hikes appropriately as it assesses how firmly the 2% target has become established.
The BOJ held a 2-day Monetary Policy Meeting starting on the 29th and decided to leave the policy rate unchanged at its current level of 1.25%. At the meeting, the BOJ expressed the view that underlying inflation had reached the 2% price-stability target. It also confirmed that the current monetary policy framework would be maintained.
Regarding the possibility of future rate hikes, the BOJ said it would continue considering increases in the policy rate while making appropriate adjustments with a view to achieving price stability on a sustainable and stable basis. The BOJ has maintained its 2% target since 2013, and the governor indicated that it would carefully assess how firmly the target had become established in light of underlying inflation reaching it.
Governor Ueda reiterated his view that underlying inflation “has already reached 2%” and emphasized the importance of confirming that the target has become established. He said that a situation in which prices rise sharply and visibly is undesirable, indicating that he intends to closely monitor decisions aimed at stabilizing future price levels.