TOKYO - The Bank of Japan will decide at its policy meeting next week whether the underlying inflation rate has reached its 2 percent target, sources close to the matter said Wednesday.
Such a determination would mark a symbolic turning point for the central bank, signaling a shift away from the prolonged fight against deflation that has shaped its monetary policy for years.
The BOJ first set its 2 percent inflation target in January 2013. Despite introducing an aggressive monetary easing program, it repeatedly pushed back its timeline for achieving the goal.
Reaching the target would come nearly 14 years after it was first announced.
The BOJ is widely expected to leave its key interest rate unchanged at 1.25 percent at its Oct. 29-30 meeting, after raising the rate last month to the highest level in 31 years.
The central bank plans to address whether inflation has reached the target in its Outlook for Economic Activity and Prices, to be released after the meeting.
The BOJ had previously projected that inflation would reach 2 percent sometime between the second half of fiscal 2026 and fiscal 2027.
Japan's core consumer prices, which exclude volatile fresh food, have risen by more than 2 percent annually for four consecutive years since 2022, leading some market participants to argue that the inflation target has already been achieved.
The BOJ, however, has stressed the need to determine whether underlying inflation, excluding temporary factors, and wages are rising steadily, rather than relying solely on headline price increases.
The central bank has also pointed to continued upward pressure on prices from rising oil costs and growing demand related to artificial intelligence, while assessing the impact of these factors on its inflation outlook.
The BOJ will continue to assess economic and price developments up to the meeting before making a final decision, with its latest economic outlook report also set to include forecasts for core inflation and real gross domestic product growth for fiscal 2026 through fiscal 2028.
