Yen Rises as BOJ Holds Rates, Inflation Nears 2% Target

WHO:

Bloomberg Markets - The Bank of Japan (BOJ) made the interest-rate decision.

CNBC - BOJ board member Hajime Takata dissented and favored raising the policy rate to 1.5%.

CNBC - Krishna Bhimavarapu, APAC economist at State Street Investment Management, described the decision as a “hawkish hold.”

CNBC - Finance Minister Satsuki Katayama reportedly told parliament that Japan was “on the cusp of shifting to a period of sustained inflation driven by rising wages.”

CNBC - CNBC’s Lisa Kim contributed to the report.

WHAT:

Bloomberg Markets - The BOJ held its benchmark rate unchanged in an 8-1 vote; the yen broadly held gains.

CNBC - The BOJ held its rate at 1.25%, its highest level since 1995, and said underlying inflation was “generally consistent” with its 2% target. The article described this as the first such assessment since the target was adopted in 2013; previously, the BOJ said underlying inflation was “approaching 2 percent.”

CNBC - The BOJ raised its fiscal-year 2027 inflation forecast to 2.6% from 2.4%, and its “core-core” forecast to 2.7% from 2.6%. Core-core inflation excludes fresh food and energy.

CNBC - The BOJ warned that underlying inflation could rise above 2%, citing that “firms' behavior has been shifting more toward raising wages and prices” and factors that could drive prices higher.

CNBC - September core inflation was 2.1%, the highest level in 2026, and exceeded expectations. Inflation-adjusted wages rose 1.5% year over year in August, the eighth consecutive month of increase.

Bloomberg Markets - The BOJ accelerated ETF sales to about ¥860 billion ($5.5 billion) annually.

Bloomberg Markets - The yen extended gains against the dollar after the BOJ kept rates steady and indicated underlying inflation had reached 2%.

WHERE:

CNBC - The article identifies the BOJ headquarters as being in Tokyo, Japan.

CNBC - Japan was experiencing a weak yen and high energy prices.

WHY:

CNBC - Bhimavarapu said the BOJ saw more rate increases ahead and growing confidence that its target was being achieved through a “self-sustaining wage-price-consumption cycle”; he also said weak growth did not justify rushing the next move.

CNBC - Experts told CNBC that energy subsidies from the Takaichi administration were holding down consumer price index figures.

CNBC - Rising wages and high energy prices were cited in the article’s account of Japan’s inflation pressures.

HOW:

CNBC - A CNBC survey of 16 economists found all expected the BOJ to prepare the ground for a rate increase in December or January next year; 13 expected a terminal rate of 1.75% to 2% around mid-2027.

CNBC - The BOJ’s rate decision was split 8-1, with Takata as the dissenter.

(UPDATED October 30, 2026 13:07 UTC)

Japan’s central bank held rates at 1.25%, while one board member favored a hike. The Bank of Japan said inflation was generally consistent with its 2% target. It raised its inflation outlook, citing stronger wage and price pressures.