Bank of Japan says inflation hit 2% target after 13 years - Bangkok Post

Japan is seeing inflation for the first time in over a decade. The Bank of Japan said on Friday that inflation had hit its two percent target, more than 13 years after it adopted the goal in a bid to pull the economy out of deflation.

For decades, successive governments struggled to pull the country out of a spiral of deflation and the two percent goal was set in 2013 as the BoJ launched massive monetary easing measures.

Although core consumer inflation at times topped the level in the early 2020s, Friday marked the first time that the BoJ confirmed the long-term price trend had been achieved. 

"Underlying CPI inflation is at a level that is generally consistent with the price stability target of two percent, and is expected to remain at around that level," the central bank said on its website. 

The BoJ also said in a statement that it had kept its key interest rate unchanged at 1.25 percent after an eight-to-one majority vote.  

The yen inched higher on Friday after the ‌Bank of Japan held rates steady as expected, while the dollar tracked Treasury yields lower as a fresh wave of selling in AI shares triggered a flight to safety. 

The BOJ left interest rates on hold at 1.25% in a widely anticipated move, but revised up its inflation forecast and stressed anew its readiness to continue pushing up borrowing costs to forestall mounting inflation risks. 

That decision came after the US Federal Reserve and the European Central Bank kept their policy rates unchanged earlier in the week. 

However Japanese officials are expected to hike in December as inflationary pressure builds. 

Japan's core inflation in September stood at 2.1 percent, sharply up from 1.7 percent in August, according to data released by the government last week.