Bank of Japan says 2% inflation goal reached after decades of deflation - Financial Times

The Bank of Japan has declared that its longstanding 2% inflation target has been reached, according to the Financial Times, marking a symbolic turning point after decades in which Japan struggled with deflation and persistently weak price growth. The milestone matters because the 2% goal has anchored BOJ policy for years; its achievement suggests the country's inflation dynamics may finally be shifting.

For markets, the significance lies less in the headline itself than in what it implies for policy. Japan's ultra-loose monetary stance has long been an outlier among major central banks, and any indication that the BOJ views its mission as complete could shape expectations around the future path of interest rates and bond purchases. Global investors watch Japanese policy closely because low Japanese yields have influenced capital flows and borrowing costs worldwide.

What to watch now is how the BOJ frames the milestone: whether it treats the target as durably met or as still requiring careful monitoring, and how it communicates any adjustments to its policy framework. The reaction in the yen, Japanese government bonds and rate-sensitive sectors will offer the clearest signal of how seriously markets take the shift.