BOJ's Ueda Hails Inflation Progress But Says Battle Isn't Over

By Megumi Fujikawa

TOKYO--Japan's central bank achieved a major milestone in its fight against deflation, but the battle to keep inflation on track must be waged constantly, Gov. Kazuo Ueda said Friday.

Ueda's remarks, delivered at a press conference, come after the Bank of Japan said underlying inflation has roughly reached its target of 2% for the first time since 2013, when it signed an accord with the government to defeat deflation.

"When it comes to achieving our target, it is important to achieve 2% inflation stably and sustainably. In that sense we are not quite there yet," the BOJ governor said. "The key is for underlying inflation to become firmly anchored at 2%."

That underscores that the BOJ's decisions remain dependent on how the economy develops. While reaching the 2% target is a significant achievement that cements expectations of more interest-rate hikes, the timing depends on a meeting-by-meeting assessment.

At the end of its two-day meeting earlier, the BOJ opted to hold interest rates at a three-decade high of 1.25%, as widely expected.

With inflationary pressures persisting, economists and investors expect the BOJ to raise rates again by year's end. Markets are now pricing in an 80% chance of a December hike.

Following the BOJ's hold, Finance Minister Satsuki Katayama said she expects the central bank to manage monetary policy appropriately to sustain stable 2% inflation, but refrained from commenting on the central bank's view that it had broadly met its price goal.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

October 30, 2026 04:32 ET (08:32 GMT)