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Japan · Central banks · Inflation & data · Source: Bank of Japan
Bank of Japan holds rate at 1.25% and speeds up ETF sales; says underlying inflation generally consistent with 2% target
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Editor: Hedal Kolanyi / AI-assisted
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Summary: The Bank of Japan left its policy rate at around 1.25% on 30 October 2026 in an 8-1 vote, with one board member pushing for a rise to 1.5%. The bank also said it will more than double the pace at which it sells its holdings of exchange-traded funds (ETFs) from January 2027.
What happened
The Policy Board decided to keep encouraging the uncollateralised overnight call rate to stay at around 1.25%. Board member Takata Hajime voted against and proposed 1.5%, arguing that with underlying inflation at the target, the bank needs to move faster toward the neutral rate. His proposal was defeated.
In a unanimous vote, the board raised the planned pace of ETF sales to about 860 billion yen a year on a book value basis, from about 330 billion yen. The bank said the new pace corresponds to about 0.1% of trading value in the stock market, and that the annual amount would be about 2,460 billion yen if converted to market value. The change starts in January 2027, and sales of real estate investment trusts stay at about 5 billion yen a year.
In its October Outlook Report, the bank said underlying consumer price inflation is at a level "generally consistent" with the 2% target. Board members' median forecast for consumer prices excluding fresh food is 2.5% for fiscal 2026 and 2.6% for fiscal 2027, the latter up 0.2 points from July. The bank described risks to prices as "skewed to the upside".
Background
CNBC reported that this is the first time the bank has made that assessment since adopting the 2% target in 2013. Separately, Tokyo consumer prices excluding fresh food rose 2.6% in October from a year earlier, according to government data reported by the Japan Times (Bloomberg). According to Jiji Press, Governor Ueda Kazuo said the target has not yet been achieved in a sustainable and stable way.
Why it matters for markets and crypto
Japan's interest rates and the central bank's sales of assets affect the yen and global funding conditions, which can shape the wider backdrop for financial markets, including digital assets. This is general background only and does not express a view on any asset.
What to watch next
- 2 November 2026, 14:00 JST: full text of the October Outlook Report.
- 10 November 2026: Summary of Opinions from this meeting.
- 23 December 2026: minutes of this meeting.
- January 2027: new ETF sales pace takes effect.
Sources
- Bank of Japan, "Statement on Monetary Policy", 30 October 2026
- Bank of Japan, "Outlook Report and Indicators Related to Underlying Inflation" (reference), 30 October 2026
- CNBC, "BOJ holds rates at 1.25%, says inflation target has been met", 30 October 2026
- Jiji Press via Nippon.com, "BOJ to Adjust Policy to Stabilize Inflation at 2 Pct: Ueda", 30 October 2026
- The Japan Times (Bloomberg), "Tokyo inflation exceeds BOJ's 2% target before rate decision", 30 October 2026
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