Bank of Japan may signal that underlying inflation has reached its 2% target, with expectations of a December rate hike rising.

BlockBeats news, October 6 - According to foreign media reports, the Bank of Japan may release an important policy signal this month: Japan's underlying inflation level has roughly reached the 2% price stability target. If this judgment is officially written into the latest economic and price outlook, it will mean that the Bank of Japan's assessment of inflation sustainability has further shifted, and provide a basis for continuing to raise interest rates in the coming months.

According to Reuters, citing three sources familiar with the Bank of Japan's thinking, a series of recent data released by the Bank of Japan has strengthened policymakers' confidence that underlying inflation, which excludes one-off factors and reflects broader demand and wage changes, has now roughly reached 2%.

The market currently generally regards December as an important window for the next interest rate hike. If the Bank of Japan confirms that underlying inflation has reached around 2%, it will further strengthen market expectations that Japan is entering a phase of sustained policy normalization.