BOJ / CENTRAL BANK
Bank of Japan
Official policy, market expectations and what they mean for JPY.
JPY currency outlookPolicy snapshot
Last policy decision
30 Oct 2026Our policy assessment
- Policy focus
- Can inflation stay near 2% long enough for the BoJ to raise rates again?
- Key risk
- Prices are rising, but weaker spending could make another rate rise harder for households and businesses.
- What to watch
- National CPI, wage trends and the November Tokyo figures should test whether inflation can remain around the target without exceptional cost shocks.
The policy debate
Our forward-looking assessment has not yet been published. The official facts and policy tests below remain available.
Evidence and upcoming tests
What changed
Separate evidence available at the last decision from releases since then- Official data · · Available at last decision
Tokyo inflation excluding fresh food fell from 2.7% in September to 2.6% in October. This is an early Tokyo figure, not national inflation.
Policy implication: Tokyo inflation is a new regional observation; it should not be mistaken for a national inflation result.
Evidence that matters
Selected readings beyond the two headline indicators above, with their limits explained.
| Indicator | Latest | Previous | Policy implication |
|---|---|---|---|
| Tokyo CPI excluding fresh foodTokyo 23 wards · preliminary year on yearA closely watched early indicator of national CPI; not the national CPI print.Official source | 2.6%Oct 2026 | 2.7%Sep 2026 | Tokyo offers an early regional signal of sustained price growth. It cannot be treated as the national reading. |
| Real GDP growthJapan real GDP · seasonally adjusted q/qOfficial source | 0.4%Q2 2026 | 0.5%Q1 2026 | Positive but slower output growth suggests the economy is still expanding. Household spending and wages matter more for judging resilience to rate increases. |
How to read these figures
CPI, HICP and PCE measure consumer-price changes, using different national methods. “Core” or “underlying” measures seek the broader price pattern. GDP measures economic output. “Seasonally adjusted” removes usual seasonal movements. One release rarely establishes a trend; compare the reference periods as well as the values.
Upcoming tests
Consequential official events. Times are shown in UTC only when verified.
- Economic releaseNational CPI (Oct)
Is inflation broad and stable enough, alongside wages, to support further gradual tightening?
- Economic releaseTokyo CPI (Nov)
Does the preliminary regional breakdown confirm or challenge the national inflation trend?
Related research
BoJ keeps hikes in play, but the yen struggles to hold its gains
The Bank of Japan held rates at 1.25%, as expected, in an 8–1 vote, with Takata favouring an increase to 1.50%. Its assessment of inflation is becoming firmer. The yen’s ability to turn that into sustained strength remains less convincing.
Image credits
Building: Wikimedia Commons, public domain
Kazuo Ueda: Bank of Japan / IMES
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