Bank of Japan maintains interest rates as inflation hits target

The Bank of Japan held its main interest rate at 1.25 percent on October 30, 2026. Policymakers declared that underlying inflation has reached the two percent target for the first time since 2013, marking a significant milestone in the country's effort to move away from decades of deflation.

The decision to maintain the borrowing cost was reached via an 8-1 split vote. Board member Hajime Takata dissented, advocating for an immediate increase to 1.50 percent to reach a neutral interest rate more quickly. Governor Kazuo Ueda noted that while progress toward anchoring inflation is being made, the bank must manage domestic price stability against global currency pressures.

In a separate monetary development, the Bank of Thailand decided to keep its policy rate at 1.00 percent on October 28. The central bank projected economic growth of 2.4 percent for 2026, supported by exports and AI-related investments, though noted that consumer spending remains weak due to household debt and unstable employment.