Bank of Japan Governor Kazuo Ueda, center, and other policy board members attend the Monetary Policy Meeting in Tokyo’s Chuo Ward on Oct. 30. (Pool)

The Bank of Japan announced on Oct. 30 that the underlying inflation rate has reached its 2 percent target, marking the first time since the central bank set the price stability goal in 2013.

Going forward, the focus of monetary policy will shift from pushing prices higher to keeping inflation stable at around that level.

The BOJ also decided at its Oct. 30 Monetary Policy Meeting to leave its policy interest rate unchanged at around 1.25 percent.

In addition, it decided to accelerate the sales of exchange-traded funds (ETFs), increasing the amount to about 860 billion yen ($5.5 billion) annually.

Until now, the BOJ had stated in its quarterly report of Outlook for Economic Activity and Prices that the “underlying CPI inflation,” excluding temporary factors, was expected to reach a level “generally consistent with the price stability target” sometime between the second half of fiscal 2026 and fiscal 2027.

In the outlook report released on Oct. 30, the BOJ wrote, “Underlying CPI inflation is at a level that is generally consistent with the price stability target of 2 percent, and is expected to remain at around that level.”

The statement indicates the BOJ’s view that underlying inflation has already reached 2 percent early in the previously projected period of the latter half of fiscal 2026 through fiscal 2027.

Within the BOJ, there had been a growing recognition that underlying inflation was rising gradually and moving closer to the 2 percent price stability target.

The target was introduced by the BOJ in 2013 and was incorporated into a joint statement made by then Prime Minister Shinzo Abe’s administration.

The BOJ maintained large-scale monetary easing from 2013 to 2024 in an effort to achieve the target, but fell short.

As a result, it has taken more than 13 years for inflation to reach the 2 percent level.

However, reaching 2 percent does not mean the goal has been fully achieved.

The BOJ has said that the price stability target must be realized in a sustainable and stable manner.

The focus of monetary policy will now be on whether underlying inflation can be anchored at around 2 percent.

To achieve that objective, the BOJ intends to continue raising interest rates.

If the current accommodative financial conditions continue, there remains a risk that underlying CPI inflation, now at the 2 percent level, could exceed the bank’s projections.

Still, the BOJ is believed to have refrained from raising the policy rate at its October meeting because it had raised it in September and wanted to assess the effects of that move.

The BOJ also decided at the Oct. 30 meeting to accelerate sales of ETFs that it had purchased as part of its large-scale monetary easing program.

Previously, it planned to sell them at a pace of about 330 billion yen a year, which would have taken roughly 112 years to complete.

Under the revised plan, beginning in January 2027, the BOJ will increase the pace to about 860 billion yen annually, aiming to complete the sales in about 43 years.

A peek through the music industry’s curtain at the producers who harnessed social media to help their idols go global.

A series based on diplomatic documents declassified by Japan’s Foreign Ministry

Here is a collection of first-hand accounts by “hibakusha” atomic bomb survivors.

Cooking experts, chefs and others involved in the field of food introduce their special recipes intertwined with their paths in life.

A series about Japanese-Americans and their memories of World War II