The Bank of Japan (BOJ) held its policy rate at around 1.25% on Oct. 30, with a new outlook showing inflation near its 2% goal and risks to prices tilted upward.
Eight board members voted in favor and one opposed the decision. Hajime Takata dissented, proposing a rate around 1.5% to move policy closer to the neutral rate and allow a more nimble response.
The BOJ said it would keep raising rates as it assesses economic activity, prices and financial conditions. Its outlook and the risks around it will guide the timing and pace of further moves. The statement did not set a date for the next increase.
The October outlook described underlying inflation as generally consistent with the 2% goal and expected it to stay near that level. The median year-over-year projections for the consumer price index (CPI) measure that excludes fresh food were 2.5% for fiscal 2026, 2.6% for fiscal 2027 and 2.0% for fiscal 2028. The 2027 forecast was 0.2 percentage point higher than in July.
The BOJ assessed risks to economic activity as broadly balanced but saw price risks skewed upward. It pointed to the Middle East situation, demand linked to artificial intelligence and foreign-exchange movements as factors to monitor. The bank also cited wage growth, crude oil prices, AI demand and yen depreciation as potential sources of price pressure. It said yen weakness may lift earnings at internationally active companies while reducing household purchasing power and making imported inputs more expensive for smaller firms.
Reuters reported that BOJ Gov. Kazuo Ueda said Japan had yet to reach the 2% inflation goal in a stable, sustainable way. Ueda also said upside price risks had not risen sharply over the preceding month. The translated remarks appeared in Channel NewsAsia (CNA); the BOJ has scheduled the official news conference record for Nov. 2, and the reported comments have not yet been checked against it.
Earlier remarks by BOJ Deputy Gov. Ryozo Himino on inflation nearing 2% and support for higher rates also addressed the inflation goal. The BOJ’s next policy meeting is scheduled for Dec. 17–18.
