Bank of Japan says inflation hit 2% target after 13 years

The Bank of Japan announced on Friday that inflation had reached its 2% target, a milestone more than 13 years after the central bank set the goal to combat deflation. Decades of failed efforts by successive administrations to break the cycle of falling prices had led to the introduction of the 2% inflation target in 2013, coinciding with the launch of extensive monetary easing measures by the BoJ.

While core consumer inflation occasionally surpassed the mark in the early 2020s, Friday marked the first instance of the BoJ formally confirming that the persistent price trend had been attained. The underlying CPI inflation aligns with the central bank's two percent price stability target and is anticipated to maintain a similar level.

The BoJ also maintained its key interest rate at 1.25% following an eight-to-one majority vote, a decision made in tandem with the US Federal Reserve and the European Central Bank's recent decision to keep their policy rates unchanged. Despite this, Japanese officials are anticipated to increase interest rates in December as inflationary pressures continue to rise.

In September, Japan's core inflation reached 2.1%, a significant increase from 1.7% in August, according to data released by the government.