Bank of Japan Expected to Raise Inflation Forecasts in October
· Business · Economic Times
The Bank of Japan plans to slightly upgrade its fiscal year 2027 inflation forecasts in October as rising oil prices exert longer-than-expected price pressures on the economy. Interest rates are expected to remain steady at 1.25% during the two-day policy meeting ending on October 30, following a rate hike last month. The central bank will likely maintain its focus on mounting inflationary risks in its quarterly report, leaving scope for another rate hike as soon as December. Consumer price growth may stay elevated for longer, though underlying inflation shows no major change and inflationary pressures have not jumped significantly. In forecasts made in July, the BOJ projected core consumer inflation hitting 2.5% in the current fiscal year ending in March 2027 before slowing to 2.4% the following year.
Why it matters
Changes to Japan's inflation forecasts and interest rate path directly influence global bond yields, currency markets, and cross-border capital flows.
Read the original report — Economic Times
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