{
  "id": 17204758,
  "title": "After decades of deflation, BOJ faces test of maintaining price stability",
  "url": "https://urgent.news/2026/10/30/after-decades-of-deflation-boj-faces-test-of-maintaining-price",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-30T09:30:10.000Z",
  "source": {
    "name": "The Mainichi",
    "slug": "the-mainichi",
    "url": "https://mainichi.jp/english/articles/20261030/p2g/00m/0bu/049000c"
  },
  "original_language": "en",
  "account": "For the Bank of Japan, reaching its 2 percent inflation target marks the start, not the end, of its mission to maintain price stability, experts contend. After two days of deliberation, the central bank confirmed that underlying inflation has largely hit the 2 percent goal, 14 years after policymakers set the target to combat Japan's deflation problem. The BOJ's April 2013 monetary easing, dubbed the \"Kuroda bazooka\" after then-Governor Haruhiko Kuroda, aimed to end chronic deflation and spark a cycle of rising wages and prices.\n\nThe assessment reflects a shift in Japan's inflation dynamics, primarily driven by a global inflation surge rather than the demand growth the central bank pursued. The critical question now is whether inflation can stay around 2 percent to ensure price stability and how the BOJ should react if upward pressure on prices intensifies.\n\nMonetary policy makers must balance raising interest rates to curb inflation from ballooning while preventing the policy from dampening wage growth and domestic demand. The BOJ may have underestimated the extent of price increases or recognized that inflation had already surpassed the target, according to Shinichiro Kobayashi, an economist at Mitsubishi UFJ Research and Consulting. Prices have remained around or above 7 percent since May, which could trigger a sharp rise in consumer prices soon.\n\nThe achievement of 2 percent inflation owes to a combination of the easing policy and changing economic conditions post-COVID-19. Supply chain disruptions, recovering demand, labor shortages, and higher import costs have made it easier for companies to raise prices, while wage growth has made consumers more tolerant of price hikes. Analysts argue that the BOJ's role in achieving the inflation target has been limited, pointing to the global inflation surge and rising inflation expectations as more significant contributors.\n\nThe BOJ initially set the 2 percent goal for the Kuroda bazooka to be realized within two years, but had to repeatedly postpone the timeline. Kobayashi believes it is crucial for the central bank to keep underlying inflation around 2 percent in the long run. While supply-demand imbalances have not generated much inflationary pressure, rising commodity prices have pushed up people's inflation expectations. However, the outlook for demand-pull inflation remains uncertain, as high oil prices and a weakened yen, which raises import costs, could slow down consumer spending.",
  "summary": "TOKYO (Kyodo) -- For the Bank of Japan, achieving its long-sought 2 percent inflation target is not the end of its quest for price stability but the b",
  "key_points": [
    "BOJ confirms underlying inflation at 2% target after 14 years",
    "Global inflation surge drives Japan's inflation dynamics",
    "BOJ must balance rate hikes with preventing wage growth slowdown"
  ],
  "editors_take": "Hitting the inflation target shifts the central bank's priority from combating deflation to managing the delicate balance between curbing rising prices and protecting domestic demand and wage growth.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}