Bank of Japan may raise inflation forecast, stand pat on rates, sources say

What happened: The Bank of Japan is expected to keep rates steady at its two-day meeting ending October 30, after raising rates last month, while likely revising its inflation forecast upward, sources said. Key numbers: Key rate at 1.25%, a 31-year high. July forecasts projected core inflation of 2.5% for the year ending March 2027 and 2.4% the following year. Why it matters: Sources said elevated inflation may persist but has not jumped, leaving scope for another hike as soon as December, and the BOJ will likely stress its focus on anchoring inflation near its 2% target.

The Bank of Japan is expected to keep rates steady at its two-day meeting ending October 30, after raising rates last month, while likely revising its inflation forecast upward, sources said.

Sources said elevated inflation may persist but has not jumped, leaving scope for another hike as soon as December, and the BOJ will likely stress its focus on anchoring inflation near its 2% target.