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[BUSINESS] · Japan · 41 sources

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Bank of Japan hits 2% inflation target and holds rates at 1.25%

The Bank of Japan (BOJ) announced on October 30 that underlying inflation has reached its 2% stability target, a milestone more than 13 years in the making. This achievement marks a significant shift for the economy, which has struggled with deflationary pressures since the target was established in 2013.

Despite this development, the BOJ decided to maintain its key short-term interest rate at 1.25%. The decision was reached via an eight-to-one vote, with Hajime Takata dissenting to propose a rate increase to 1.5%. Governor Kazuo Ueda noted that while inflation is generally consistent with the target, the bank remains vigilant against upside risks, including rising energy costs, a weak yen, and increased demand related to artificial intelligence.

In a separate move, the central bank unanimously approved accelerating the annual pace of its exchange-traded fund (ETF) sales. Starting in January 2027, the sales will increase to approximately 860 billion yen annually on a book value basis, up from the previous 330 billion yen. This new pace is expected to represent about 0.1% of the market's annual trading value.

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Bank of Japan · Federal Reserve · Hajime Takata · Japan · Kazuo Ueda · Nikkei · Nikkei 225 · Sanae Takaichi · Taiwan · Taiwan Stock Exchange · Tokyo

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