The Bank of Japan raised its policy rate from around 1.0% to around 1.25% at its meeting on the 18th, accelerating the pace of rate hikes. It has been reported that underlying inflation is expected to rise to the BOJ’s 2% target by mid-next year.
The Bank of Japan decided at its monetary policy meeting on the 18th to raise its policy rate from around 1.0% to around 1.25%. The previous hike took place in June, and the latest move is seen as accelerating the pace to roughly once every six months.
It has been reported that the hike was motivated by the need to contain inflation, as allowing inflation to go unchecked could cause underlying consumer price inflation to diverge from the BOJ’s target.
Reports suggest that this decision points to an outlook in which inflation will reach the BOJ’s 2% target by mid-next year.