World Economy

Bank of Japan Signals Rate Hike Possible as Inflation Finally Reaches 2% Target

The Bank of Japan held its benchmark interest rate at 1.25% while signaling underlying inflation has reached its 2% goal for the first time in over a decade. The decision came in an 8-1 vote, opening the door to a potential rate increase as early as December. The milestone marks a significant moment for the BOJ after years of struggling to meet its inflation objective. The central bank also accelerated its exchange-traded fund sales to approximately ¥860 billion, or $5.5 billion annually. Currency markets responded positively to the announcement, with the yen extending gains. Consumer inflation in major urban centers, including Tokyo, remains elevated above target levels.