Bank of Japan May Raise Next Fiscal Year's Inflation Forecast: Rates Expected Steady on October 30, December Hike Still Possible
The Bank of Japan may raise its inflation outlook for the next fiscal year in forecasts due this month, as rising oil prices exert longer-than-expected price pressures on the economy, Reuters reported on October 20, citing four sources familiar with the central bank's thinking. Having just raised interest rates last month, the BOJ is expected to keep rates steady at the two-day policy meeting ending on October 30, unless the yen renews its slide, lifting import costs and broader inflation, the sources said.
In forecasts made in July, the BOJ projected core consumer inflation of 2.5 percent in the fiscal year ending in March 2027, before slowing to 2.4 percent the following year, assuming the pass-through of the initial spike in fuel costs would moderate from the latter half of next year. The sources said the board may slightly revise up its core inflation forecast for fiscal 2027 in the quarterly report due after this month's meeting, to reflect the pass-through from the recent, renewed spike in crude oil prices. Any revision is expected to be minor, with little sign that dangerous second-round effects, in which the energy shock triggers a spiral of sharp wage and price rises, are becoming embedded in the economy.
"Consumer price growth may stay elevated for longer than expected, though there's no big change in underlying inflation," one source said, a view echoed by two other sources. "Inflation pressures exist but haven't jumped, so there's little reason to rush," another source said on the timing of the next rate hike. The sources said the central bank will likely maintain its focus on mounting inflationary risks in the quarterly report, leaving scope for another rate hike as soon as December. The sources spoke on condition of anonymity as they were not authorised to speak publicly, and the BOJ was not immediately available for comment. (GSM, based on Reuters reporting)
Source: GSM · USA (original Chinese edition)
Photo: 图：位于东京日本桥的日本银行总部本馆。图片来源：Wikimedia Commons，公共领域。Photo: The Bank of Japan's head office main building in Nihonbashi, Tokyo. Via Wikimedia Commons, public domain.
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