The Bank of Japan may be only days away from a historic moment.

According to Kyodo News, the Bank of Japan will hold a monetary policy meeting from October 29 to 30, at which it will make a formal judgment on whether the pace of price increases has reached its long-term target of 2%. If the target is confirmed as achieved, it will mark a symbolic turning point for Japan's anti-deflation policy framework after nearly 14 years.

On the rate front, the market expects the meeting to keep the current policy rate of 1.25% unchanged. The Bank of Japan had just completed a rate hike at its previous meeting in September, and another adjustment in the short term is unlikely. The core focus of this meeting lies in the policy statement rather than the rate itself.

A 14-Year Goal May Reach Its Conclusion at This Meeting

The Bank of Japan established its 2% inflation target in January 2013 as a core pillar of its large-scale monetary easing policy. However, for many years afterward, this target was never steadily achieved, and the timetable for reaching it was repeatedly postponed.

If this meeting formally confirms that the inflation target has been achieved, it will mean the Bank of Japan has fulfilled this commitment nearly 14 years after setting the goal.

According to the Bank of Japan's plan, the formal statement will be reflected in the Outlook Report on Economic and Price Conditions released after the meeting. The Bank of Japan had previously projected that the inflation target would be achieved in the second half of fiscal 2026 to around fiscal 2027, and the latest data before this meeting will serve as the key basis for the final judgment.

Data Already Points the Way, but the Bank of Japan Leans Cautious

On the inflation data front, statistics from the Ministry of Internal Affairs and Communications show that the nationwide consumer price index excluding fresh food has maintained a year-on-year increase of more than 2% for four consecutive years since 2022, and some in the market have long argued that the inflation target has in effect already been met.

However, the Bank of Japan has consistently emphasized that judging whether the target has been achieved requires excluding the impact of one-off factors and focusing on underlying price trends and whether wages can continue to rise steadily, and it has therefore remained cautious in its statements.

If the Bank of Japan ultimately makes a formal confirmation this time, it will be a clear signal that it judges the above conditions to have been basically met, and it will also mean that the path of Japan's monetary policy transition from structural easing toward normalization has become further clarified.