BOJ holds rates as inflation aligns with 2% target for first time since 2013
The central bank said underlying inflation has reached its target and signaled more rate hikes as it kept borrowing costs at a 31-year high.
- On Dec. 19, 2025, the Bank of Japan held interest rates at 1.25%, the highest level since 1995, declaring inflation "generally consistent" with its 2% target for the first time since 2013.
- Core inflation reached 2.1% in September, exceeding expectations, while Japan's inflation-adjusted wages rose for the eighth consecutive month in August, climbing 1.5% from a year earlier.
- Board member Hajime Takata dissented from the 8-1 decision, seeking a rate hike to 1.5%, while a CNBC survey of 16 economists anticipated the BOJ would set the stage for future hikes.
- Thirteen respondents expect the BOJ to reach a terminal rate of 1.75% to 2% by mid-2027, as Japan grapples with a weak yen and high energy prices driving inflation.
- Finance Minister Satsuki Katayama stated earlier this month that Japan was "on the cusp of shifting to a period of sustained inflation," though experts claim Takaichi administration energy subsidies are currently restraining consumer price index figures.
33 Articles
33 Articles
Japan keeps rates steady as inflation hits 2pc target
The Bank of Japan kept interest rates steady on Friday but declared victory in a nearly 14-year battle to hit its price target and signalled vigilance against inflationary risks, suggesting scope to hike borrowing costs as soon as December. With underlying inflation having roughly hit two percent, the central bank must focus on anchoring it around the target, it said, stressing anew that its policy has entered a new, more hawkish phase open to r…
BoJ holds policy rate at 31-year high of 1.25%, reaffirms rate-hike
The Bank of Japan kept its short-term policy rate unchanged at 1.25% in an 8-1 vote at its October meeting, meeting market expectations following consecutive 25-basis-point rate increases in June and September. The policy rate remains at its highest level
The decision was largely planned, but inflation estimates open the door to a close in the coming months.
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