Business · Economy · 1 hr ago
Bank of Japan expected to hold rates, with December hike in focus
Analysts expect the Bank of Japan to hold its rate at 1.25% at its meeting on October 29 and 30.
The bank is expected to give itself more time to assess the effects of previous rate increases before deciding on another move.
After years of very low rates aimed at ending falling prices, the bank is shifting toward keeping inflation near 2%.
Higher energy and import costs, partly linked to a weaker yen, have added to inflation pressures, while wages have continued to grow.
The bank says gradual rate rises may be needed to keep inflation stable, even as financial conditions remain supportive of borrowing.
Analysts expect the rate to reach 1.5% in December, but Governor Kazuo Ueda’s comments after the meeting may show whether the bank plans to act then or wait until January.
Economists expect the Bank of Japan to keep its key interest rate at 1.25% at its October 29-30 meeting.
Analysts expect the bank to signal that it may raise rates in December as it focuses on containing inflation.
A Reuters poll found economists expect the rate to reach 1.5% in December.
The bank is expected to allow more time to assess how earlier rate increases are affecting lending conditions.
Rising energy costs and higher import prices linked to a weaker yen have added to inflation pressures.
- Who
- The Bank of Japan and economists surveyed by Reuters.
- What
- The bank is expected to hold its key interest rate at 1.25% in October. Economists expect a hike to 1.5% in December.
- When
- The next policy meeting is scheduled for October 29-30, 2026. A rate increase is expected in December.
- Where
- Japan.
- Why
- The bank is expected to assess the effects of earlier rate increases while inflation pressures rise and inflation expectations remain near its 2% target.
This story does not have two clearly opposing sides.
The Bank of Japan launched a large-scale stimulus program to lift the economy out of deflation and move inflation toward its 2% target.
The bank raised interest rates.
The bank raised rates again, and Governor Kazuo Ueda indicated a shift in the policy focus toward containing inflation.
The bank is scheduled to hold its next policy meeting, where economists expect it to keep the rate at 1.25%.
Economists expect the bank to raise the rate to 1.5%.
- October meeting
- Scheduled for October 29-30, 2026
- Current policy rate
- 1.25%
- Expected December rate
- 1.5%
- Inflation target
- 2%
- Neutral-rate range
- 1.1%-2.5%
4 sources
What people are saying
the stage represents a historic moment for the bank, but it puts it before a more complicated task, as it must now move from supporting economic activity to curbing inflationary pressures