MUFJ Morgan Stanley forecasts that the Bank of Japan (BOJ) will officially declare achievement of its 2% inflation target for the first time in 13 years at its upcoming monetary policy meeting. The institution stated in a report that BOJ will conclude in its economic and price outlook report that core consumer price inflation has reached a level broadly consistent with the 2% price stability target. The forecast marks formal recognition of a goal set approximately 13 years ago in January 2013, when BOJ and the Japanese government jointly announced the inflation target in a joint statement.
BOJ Shifts to Bilateral Risk Monitoring
MUFJ stated that the declaration will signal BOJ's official acknowledgment that the target set at that time has finally been achieved. The institution explained that BOJ will now shift away from its previous focus on downside risks to inflation and move toward monitoring risks in both directions. MUFJ noted that BOJ's inflation assessment must become more meticulous than in the past, as circumstances may enable consecutive rate hikes or larger-scale rate increases depending on conditions.
MUFJ Forecasts Rate Hold and Future Hikes
MUFJ predicted that BOJ will keep its benchmark rate unchanged at the upcoming meeting while maintaining a monetary policy stance that emphasizes upside risks to prices for the time being. The institution forecasts additional rate hikes will be implemented in December and next April. BOJ is scheduled to hold its monetary policy decision meeting over two days.
FAQ
What did MUFJ Morgan Stanley forecast about the Bank of Japan's inflation target?
MUFJ Morgan Stanley forecasts that BOJ will officially declare achievement of its 2% inflation target for the first time in 13 years at its upcoming monetary policy meeting, concluding that core consumer price inflation has reached a level broadly consistent with the target.
When did the Bank of Japan originally set its 2% inflation target?
BOJ set the 2% inflation target approximately 13 years ago in January 2013 through a joint statement announced with the Japanese government.
What rate changes does MUFJ predict for the Bank of Japan?
MUFJ predicts BOJ will keep its benchmark rate unchanged at the upcoming meeting scheduled for two days, with additional rate hikes forecasted for December and next April.
