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

The Bank of Japan (BoJ) said Friday inflation had hit its 2% 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 — sustained falls in prices that are harmful for economic growth — and the 2% 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 2%, 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% after an eight-to-one majority vote.

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%, sharply up from 1.7% in August, according to data released by the government last week.