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● LIVE Updated 56m ago · 10 sources tracked

Bank of Japan is expected to hold rates this week

The Bank of Japan kept its key interest rate unchanged at 1.25% following its meeting on October 30, confirming that underlying inflation has reached its 2 percent target for the first time since the goal was established in 2013. Consumer prices are rising more than 2 percent a year in a stable and sustainable manner, while business service prices accelerate. Despite holding rates steady, policymakers maintained a hawkish stance. A CNBC survey indicates that 83 percent of economists expect a rate hike in December, with all respondents anticipating a move by January as inflation and wages continue to rise.

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⚡ Key Developments & Real-Time Context
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  • ✓ The Bank of Japan kept its key interest rate unchanged at 1.25% on October 30.
  • ✓ Underlying inflation reached its 2% target for the first time since the goal was set in 2013.
  • ✓ 83% of surveyed economists expect a rate hike in December.
  • ✓ All survey respondents expect the central bank to set the stage for a rate hike in December or January.
🛡️ Source Corroboration: 10 independent reporting domains (100% confidence) ⏱ Read time: ~3 min

What changed

The Bank of Japan delivered its anticipated policy hold while confirming that underlying inflation has reached its 2 percent target for the first time since 2013.

Live updates

  1. Bank of Japan Holds Rates Steady at 1.25% While Signaling Future Hikes

    The Bank of Japan kept its key interest rate unchanged at 1.25% following its meeting on October 30, confirming that underlying inflation has reached its 2 percent target for the first time since the goal was established in 2013. Consumer prices are rising more than 2 percent a year in a stable and sustainable manner, while business service prices accelerate. Despite holding rates steady, policymakers maintained a hawkish stance. A CNBC survey indicates that 83 percent of economists expect a rate hike in December, with all respondents anticipating a move by January as inflation and wages continue to rise.

    Why it matters

    Inflation upticks and an accelerating price trend indicator jumping above 3 percent have strengthened the case for tighter monetary policy. The International Monetary Fund has indicated that the bank may need to tighten faster if inflation beats forecasts. Lisa Kim reported for CNBC that the bank is expected to hike rates into the middle of next year, aiming for a terminal rate between 1.75 percent and 2 percent.

    What is confirmed

    • The Bank of Japan kept its key interest rate unchanged at 1.25% on October 30.
    • Underlying inflation reached its 2% target for the first time since the goal was set in 2013.
    • 83% of surveyed economists expect a rate hike in December.
    • All survey respondents expect the central bank to set the stage for a rate hike in December or January.

    Still unconfirmed

    • The Bank of Japan is expected to hike rates into the middle of next year, with a terminal rate of 1.75% to 2%.
    • The International Monetary Fund stated the central bank may need to tighten faster if inflation beats forecasts.

    What to watch next

    • Whether the Bank of Japan implements a rate hike at its December policy meeting.
    • Further consumer price and wage growth data updates in Japan.
    Sources used for this update (12)
    1. WSJ — Japan Consumer Inflation Uptick Offers Tailwind for BOJ Rate Hike
    2. CNBC — Bank of Japan is expected to hold rates this week — but stay hawkish: CNBC survey
    3. Reuters — Bank of Japan's hawkish pause to leave scope for December hike
    4. Bloomberg.com — Japan’s Business Service Prices Accelerate Ahead of BOJ Meeting
    5. Yahoo Finance — BOJ may need to tighten faster if inflation beats forecast, IMF says
    6. Bloomberg.com — BOJ’s Price Trend Indicator Jumps to Above 3%, Backing Hike Case
    7. www.ebc.com — BOJ Rate Decision: Why a Hold at 1.25% Could Signal a ...
    8. www.cnbc.com — Bank of Japan is expected to hold rates this week — but stay ...
    9. www.cnbc.com — Bank of Japan is expected to hold rates this week — but stay hawkish: CNBC survey
    10. www.japantimes.co.jp — Bank of Japan holds rates steady even as inflation ticks up
    11. wsau.com — Morning Bid: One last central bank surprise
    12. thereport.live — Bank of Japan confirms 2% inflation target, keeps interest rate unchanged
    confidence 100%
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