The BOJ is considering judging that underlying inflation has reached around 2% and may reflect this in the Outlook Report at this month's meeting. With temporary factors affecting the CPI, the BOJ intends to assess when the target is reached and whether the increase becomes established.
The BOJ is considering judging that underlying inflation has reached around 2%, according to sources. The assessment could be reflected in the Outlook Report at the Monetary Policy Meeting scheduled for 29 and 30 October at the earliest. Companies have recently become more active in passing higher raw material and labor costs on to prices, prompting the view that achievement of the target is within reach.
The BOJ places importance on underlying inflation trends and has previously described the timing of underlying inflation reaching 2% as being from the second half of fiscal 2026 through fiscal 2027. At a press conference following the September meeting, Governor Ueda Kazuo (植田 和男) said that it was "roughly on target for 2%," indicating that he believed inflation was drawing closer to the target.
The focus going forward will be whether underlying inflation, having reached around 2%, becomes established at that level. The BOJ sees risks that inflation could slow again or overshoot, and intends for the time being to assess whether it will remain stable around 2%.