BOJ may signal underlying inflation has hit 2% goal, sources say

According to Business Recorder, three people familiar with the Bank of Japan's thinking said the institution could announce this month that its underlying inflation is nearly at the 2% goal. Such a statement would carry little practical weight, but it would bolster the prevailing market bet on a December increase and show that policymakers are willing to keep tightening at short intervals.

Sources also said the BOJ has started emphasising that underlying inflation should stay near its target when it judges the speed and timing of further hikes. With the September increase still fresh, many officials would rather wait for further evidence on how the earlier increases are affecting financial conditions at home. Recent data, including Tokyo consumer prices and the quarterly tankan survey of businesses, appear to be firming the bank's conviction, although the survey showed corporate price pressures flat rather than rising, reducing the urgency for another move this month.

One source described inflation expectations as high but not spiking, while another said prices are tracking the bank's forecasts. The BOJ is likely to cite steady wage gains and a renewed climb in crude prices in a quarterly report due after its October 29-30 policy meeting, sources said. In its July report, the bank expected underlying inflation to hit levels in line with its goal between October and March 2028.