In brief
Japan's central bank left its benchmark rate at roughly 1.25% following a 31‑year high hike, while announcing that underlying inflation has generally met its 2% target. The BoJ will monitor external pressures and may raise rates again, and the next policy meeting on Dec. 17‑18 is seen as likely to bring further changes.
In Tokyo, the Bank of Japan announced on Friday that it would keep its key benchmark interest rate unchanged at around 1.25 percent, following a September increase that lifted the rate to a 31‑year high.
The decision came after the BoJ raised its benchmark by 0.25 percentage points in September, bringing the rate to 1.25 percent for the first time in three decades.
BOJ said that underlying inflation has "generally reached its 2 percent target" after a decade of effort to end deflation.
"Underlying inflation has generally reached its 2 percent target," the BoJ said.
The bank highlighted the influence of higher prices for crude oil, semiconductor components and other goods, as well as the yen’s depreciation, as current drivers of price growth that are expected to persist for some time.
In its quarterly economic outlook, the BoJ raised its core consumer price inflation forecast for fiscal 2027 to 2.6 percent from 2.4 percent, while trimming its real GDP growth projection to 0.7 percent from 0.8 percent.
BoJ Governor Kazuo Ueda noted that the policy will increasingly focus on keeping inflation firmly anchored around 2 percent and that the central bank could raise rates again if prices were to overshoot the target.
Markets anticipate another rate hike at the bank’s next policy meeting on Dec. 17‑18 as conditions evolve.
