Bank of Japan holds rate at 1.25% and raises inflation forecasts

The Bank of Japan held its policy rate steady on 30 October 2026, while raising its inflation forecasts, Reuters said in an account carried by CNA.

ActionForex says higher energy and raw-material costs are expected to constrain household purchasing power and company profits, while wage increases, government measures and global demand related to superintelligence (SI) provide support.

ActionForex said the bank left the rate at 1.25% in an 8–1 vote. Board member Hajime Takata favored an increase to 1.50%. He argued that underlying inflation—the persistent trend in price increases—had reached the bank’s 2% target and called for faster rate increases.

Higher inflation forecasts

The bank raised its median forecasts for consumer-price inflation in fiscal 2027 compared with its July projections.

The forecasts exclude the effect of a proposed consumption-tax reduction on food and beverages.

The bank expects higher prices for crude oil, semiconductors and other goods, together with a weaker yen, to push measured inflation clearly above its target in the first half of its projection period. It expects inflation to ease toward the target later.

Yen heads for another daily gain

Reuters said the yen was heading for its third consecutive daily gain against the dollar after the announcement. The dollar was down 0.1% at 157.54 yen. Renewed selling in shares tied to SI also drove demand for currencies investors viewed as safer alternatives to the dollar.

Further increases remain conditional

The bank judged borrowing conditions still supportive of economic activity after earlier rate increases. It reiterated that further increases would be appropriate if its economic and inflation projections materialize.