Bank of Japan set to hold rate as inflation reaches long-awaited milestone
The milestone on the price goal would mark the culmination of a campaign that began in 2013.
The Bank of Japan is expected to maintain its benchmark interest rate unchanged on October 30, signaling that underlying inflation has finally hit its 2% target. This significant milestone could provide a stronger argument for subsequent rate hikes. The central bank had increased the interest rate to 1.25% in September, marking the quickest pace of rate hikes in 36 years.
The focus on October 30 will be whether the BOJ acknowledges that underlying inflation has broadly reached its 2% goal for the first time since the target was established in 2013. This outcome, if achieved, would support calls for additional rate hikes, as borrowing costs remain relatively low and stimulative in Japan. An upgraded assessment of underlying inflation could pave the way for another rate hike at the December meeting, when most economists anticipate action.
The BOJ governor has recently indicated that underlying inflation is "very close" to the 2% target, preparing investors for a potential change in the bank's outlook report on October 30.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
