BOJ likely to conclude 2% inflation goal met, keep policy rate unchanged
TOKYO (Kyodo) -- The Bank of Japan is expected to conclude that underlying inflation has effectively reached its 2 percent target during a two-day pol
The Bank of Japan is set to conclude that underlying inflation has likely reached its 2 percent target during a two-day policy meeting starting Thursday, marking a significant milestone 14 years after the goal was established. While the central bank remains cautious about inflation surpassing the set rate, it is now focusing on maintaining price increases around 2 percent.
Economists anticipate that the Bank of Japan will maintain its key policy rate at approximately 1.25 percent, following a rate increase at their last meeting in September. The 2 percent inflation target was set jointly by the Bank of Japan and the government in January 2013 as part of a strategy to exit deflation and stimulate economic growth.
Initially, Governor Haruhiko Kuroda aimed to achieve this target within two years through aggressive monetary easing, but the goal has since faced delays. Recent inflationary pressures have primarily been attributed to external factors, such as a surge in energy costs. Economists argue that sustained salary growth is crucial for creating a positive cycle of rising wages and prices, thereby driving stronger consumption.
However, persistent inflation and higher interest rates could dampen household and business spending, potentially stifling Japan's economic recovery even as the country moves away from deflationary pressures. The Bank of Japan has gradually raised interest rates to curb its extensive stimulus measures. Market expectations point to another rate hike at the bank's upcoming policy meeting on December 17-18.
Written by urgent.news from The Mainichi's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
