--- title: "Bank of Japan Interest Rate Decision: Rate Kept at 1.25%" description: The Bank of Japan interest rate decision on Oct 30, 2026 kept rates at 1.25% while raising the annual ETF sales pace to 860 billion yen. url: https://ginity.vn/en/blog/boj-maintains-policy-interest-rate-october-2026 canonical: https://ginity.vn/en/blog/boj-maintains-policy-interest-rate-october-2026 markdown: https://ginity.vn/en/blog/boj-maintains-policy-interest-rate-october-2026.md language: en datePublished: 2026-10-30T00:00:00+07:00 dateModified: 2026-10-30T00:00:00+07:00 author: name: Gini url: https://ginity.vn/en/authors/gini reviewer: Ginity Editorial Desk analyst: name: Đào Ngọc Bảo Linh role: Finance and securities specialist location: Ho Chi Minh City telephone: "+84932439639" generatedBy: name: Ginix Harness url: https://ginix.vn desk: id: macro name: Macro & monetary url: https://ginity.vn/en/topics/macro tickers: - USDJPY - NIKKEI225 sources: - name: Bank of Japan url: https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030a.pdf title: Statement on Monetary Policy - name: Bank of Japan url: https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030b.pdf title: Outlook for Economic Activity and Prices - name: Bank of Japan url: https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030c.pdf title: Amendment to Disposal Principles of ETFs - name: Statistics Bureau of Japan url: https://www.stat.go.jp/data/cpi/sokuhou/tsuki/pdf/zenkoku.pdf title: Consumer Price Index September 2026 - name: CNA / Reuters url: https://www.channelnewsasia.com/business/boj-declares-victory-in-hitting-price-target-signals-near-term-hikes-6504991 title: BOJ declares victory in hitting price target, signals near-term hikes - name: Vietnam.vn url: https://www.vietnam.vn/en/ngan-hang-trung-uong-nhat-ban-giu-nguyen-lai-suat-o-muc-1-25 title: Bank of Japan maintains policy interest rate at 1.25% - name: Tin nhanh chứng khoán url: https://www.tinnhanhchungkhoan.vn/boj-giu-nguyen-lai-suat-khi-lam-phat-tien-sat-muc-tieu-sau-13-nam-post400483.html title: BOJ giữ nguyên lãi suất khi lạm phát tiến sát mục tiêu sau 13 năm publisher: Ginity attribution: 'Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content.' disclaimer: "Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources." usageTerms: https://ginity.vn/ai.txt --- # Bank of Japan Interest Rate Decision: Rate Kept at 1.25% > The Bank of Japan interest rate decision on Oct 30, 2026 kept rates at 1.25% while raising the annual ETF sales pace to 860 billion yen. Gini · Macro & monetary · 2026-10-30 · https://ginity.vn/en/blog/boj-maintains-policy-interest-rate-october-2026 _Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_ ## Key takeaways - The Bank of Japan maintained its policy rate at around 1.25% at its October 30, 2026 meeting. - The Policy Board approved an accelerated ETF sales pace of approximately 860 billion yen per year starting January 2027. - Japan core CPI reached 2.1% in September 2026 according to MIC data, marking the first time in 2026 that core inflation exceeded the 2% target. According to Vietnam.vn, the Bank of Japan (BOJ) concluded its scheduled monetary policy meeting on October 30, 2026, deciding to keep its uncollateralized overnight call rate steady at approximately 1.25%. Market participants across international financial hubs had tracked the two-day gathering closely following a previous rate increase delivered at the September 2026 gathering. The monetary authorities indicated that this pause allows the Policy Board adequate room to examine how sequential rate hikes over past quarters are transmitting into corporate funding conditions, bank lending appetites, and consumer expenditure patterns. Price dynamics across Japan provided critical context for the decision (see how to accurately [read CPI and inflation numbers](/en/blog/cpi-and-inflation-reading-the-numbers)). According to inflation data released by the [Ministry of Internal Affairs and Communications (MIC)](https://www.stat.go.jp/data/cpi/sokuhou/tsuki/pdf/zenkoku.pdf) on October 23, 2026, nationwide core consumer prices excluding fresh food rose 2.1% year-on-year in September 2026. Significantly, according to [Reuters via CNA](https://www.channelnewsasia.com/business/boj-declares-victory-in-hitting-price-target-signals-near-term-hikes-6504991) on October 30, 2026 and reporting by [Tin nhanh chứng khoán](https://www.tinnhanhchungkhoan.vn/boj-giu-nguyen-lai-suat-khi-lam-phat-tien-sat-muc-tieu-sau-13-nam-post400483.html), this marks the first instance since adopting the price stability target in 2013 that the central bank formally declared underlying inflation to be broadly consistent with its 2% objective. ## Policy Board Voting Breakdown According to the BOJ, the policy stance reached on October 30, 2026 revealed notable division within the Policy Board. The dissenting vote came from board member Hajime Takata. According to the BOJ, Takata expressed a hawkish view, arguing that underlying price momentum had firmly reached the target level and warranted swifter adjustments toward a neutral rate setting. At the October 30, 2026 meeting, he formally proposed hiking the target rate to approximately 1.5%, an amendment that failed to secure backing from the remaining board members. This division illustrates that while a majority favored pausing to evaluate cumulative policy impact, internal support for continued monetary tightening remains present within the central bank leadership. ## Economic Outlook and Inflation Projections Alongside the rate announcement, the central bank published its quarterly Outlook for Economic Activity and Prices, offering detailed median projections from Policy Board members. According to the [Outlook for Economic Activity and Prices](https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030b.pdf) published on October 30, 2026, the central bank projected real GDP growth for fiscal year 2026 at 0.7%. The persistent strength in projected price measures highlights the central bank's perspective that wage gains and service costs are reinforcing one another, gradually anchoring long-term inflation expectations close to the target. ## Real Interest Rate Mechanics and Policy Room A key consideration in central bank policy transmission is that the effective degree of monetary accommodation is determined through real interest rates rather than nominal interest rates alone, a fundamental concept when [assessing bond yield spreads and risk](/en/blog/assessing-credit-risk-and-bond-yield-spreads). Under classic monetary principles, the Fisher equation expresses this relationship: $$\text{Real Interest Rate} = \text{Nominal Interest Rate} - \text{Expected Inflation Rate}$$ According to this article's hypothetical assumption for October 30, 2026, with the BOJ nominal policy rate set at 1.25% alongside market inflation expectations anchored at 2.00%, the real interest rate is calculated as: $$\text{Real Interest Rate} = 1.25\% - 2.00\% = -0.75\%$$ The resulting negative real interest rate indicates that financial conditions in Japan remain structurally accommodative, despite the notable rise in nominal borrowing costs since negative interest rate policy ended in March 2024. This structural gap confirms why the BOJ leadership views monetary accommodation as still supportive, leaving room for further adjustments as macroeconomic conditions evolve. ## ETF Sales Pace and Balance Sheet Normalization In addition to maintaining its policy rate, the Policy Board adopted formal amendments to its principles for disposing of exchange-traded fund (ETF) holdings. The operational schedule was published by the [Bank of Japan](https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030c.pdf) on October 30, 2026. According to [Reuters via CNA](https://www.channelnewsasia.com/business/boj-declares-victory-in-hitting-price-target-signals-near-term-hikes-6504991) on October 30, 2026, the central bank decided to accelerate its annual sales of ETFs from January to approximately 860 billion yen per year, expanding significantly from the previous divestment pace of around 330 billion yen annually to advance balance sheet normalization. Providing advance guidance prior to implementation allows equity market participants in Tokyo sufficient time to assess portfolio liquidity and manage potential changes in supply-demand dynamics. ## Currency and Financial Market Reactions The combination of an on-hold rate decision and balanced press conference commentary generated measured moves across foreign exchange and government debt markets in Japan. The Japanese yen traded in a choppy band against the US dollar following the statement release. Substantial policy rate differentials between the Federal Reserve and the BOJ continue to limit immediate upward momentum for the yen. Export-oriented Japanese corporations continue to monitor the central bank's trajectory closely, as shifts in policy stances across global central banks (such as when [central banks direct lending rate cuts](/en/blog/state-bank-directs-deposit-and-lending-rate-cuts-late-2026)) can influence trade competitiveness and repatriated earnings. ## Sources - Bank of Japan: [Amendment to Disposal Principles of ETFs](https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030c.pdf) (2026-10-30) - Bank for International Settlements: [Central Bank Policy Rates](https://data.bis.org/topics/CBPOL) (2026-10-30) - Bank of Japan: [Statement on Monetary Policy](https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030a.pdf) (2026-10-30) - Bank of Japan: [Outlook for Economic Activity and Prices](https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/k261030b.pdf) (2026-10-30) - Statistics Bureau of Japan: [Consumer Price Index September 2026](https://www.stat.go.jp/data/cpi/sokuhou/tsuki/pdf/zenkoku.pdf) (2026-10-23) - CNA Reuters: [BOJ declares victory in hitting price target](https://www.channelnewsasia.com/business/boj-declares-victory-in-hitting-price-target-signals-near-term-hikes-6504991) (2026-10-30) ## Frequently asked questions ### What was the Bank of Japan's policy rate decision on October 30, 2026? The Bank of Japan maintained its uncollateralized overnight call rate target at 1.25%. ### How did the BOJ adjust its ETF disposal pace? The BOJ increased its annual ETF disposal target from approximately 330 billion yen to 860 billion yen to steadily reduce its balance sheet. ### What is the BOJ's inflation outlook for fiscal year 2026? The BOJ projected fiscal year 2026 real GDP growth at 0.7%, supported by steady wage gains and domestic demand. --- _Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._ _Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._