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BoJ signals focus on anchoring inflation near its 2% target
The bank also flagged upside inflation risks from the Iran conflict, strong AI-related demand, and yen weakness.
Bank of Japan Governor Kazuo Ueda said the central bank is placing more importance on anchoring underlying inflation around its 2% target, indicating a shift from simply achieving durable inflation toward avoiding overshooting it, Action Forex reported.
Speaking at an annual meeting of securities firms, Ueda said economic and price developments are broadly in line with the BoJ’s baseline scenario and that financial conditions remain accommodative and continue to support economic activity even after the rate hike in September.
He added that the BoJ would keep raising borrowing costs to adjust the degree of monetary support, while warning that factors including the Iran conflict, strong AI-related demand, and yen weakness could add to upside inflation risks.
The wording shift could be reinforced at the BoJ’s October 29 to 30 meeting, and Reuters sources cited by Action Forex said the bank may note in its quarterly outlook that underlying inflation has roughly reached 2%, compared with the July report’s timeframe projecting target-consistent underlying inflation between October 2026 and March 2028.