--- title: BOJ Raises Inflation Projections in October 2026 Outlook description: The Bank of Japan raised its fiscal 2027 core inflation projection to 2.6% in its October 2026 outlook report, highlighting structural wage and price momentum. url: https://ginity.vn/en/blog/boj-raises-inflation-projections-october-2026-outlook canonical: https://ginity.vn/en/blog/boj-raises-inflation-projections-october-2026-outlook markdown: https://ginity.vn/en/blog/boj-raises-inflation-projections-october-2026-outlook.md language: en datePublished: 2026-11-02T00:00:00+07:00 dateModified: 2026-11-02T00:00:00+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: [] sources: - name: Bank of Japan (BOJ) url: https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf title: Outlook for Economic Activity and Prices (October 2026) - name: Bank of Japan (BOJ) url: https://www.boj.or.jp/en/mopo/outlook/gor2607b.pdf title: Outlook for Economic Activity and Prices (July 2026) - name: Statistics Bureau of Japan url: https://www.stat.go.jp/english/data/cpi/index.html title: Consumer Price Index - name: Báo Điện tử Chính phủ url: https://baochinhphu.vn/the-gioi-tuan-qua-phia-sau-nhung-quyet-dinh-chinh-sach-lai-suat-102261101162915399.htm title: "Thế giới tuần qua: Phía sau những quyết định chính sách lãi suất" - name: VnEconomy url: https://vneconomy.vn/boj-giu-nguyen-lai-suat-tuyen-bo-chien-thang-trong-cuoc-chien-chong-giam-phat.htm title: BOJ giữ nguyên lãi suất, tuyên bố chiến thắng trong cuộc chiến chống giảm phát 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 --- # BOJ Raises Inflation Projections in October 2026 Outlook > The Bank of Japan raised its fiscal 2027 core inflation projection to 2.6% in its October 2026 outlook report, highlighting structural wage and price momentum. Gini · Macro & monetary · 2026-11-02 · https://ginity.vn/en/blog/boj-raises-inflation-projections-october-2026-outlook _Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_ ## Key takeaways - The BOJ raised its median fiscal 2027 core CPI forecast from 2.4% to 2.6% in its report published on November 2, 2026. - Fiscal 2026 real GDP growth projection was upgraded from 0.6% to 0.7% on resilient technology and equipment demand. - Underlying inflation showed steady progress toward the 2% target supported by positive output gaps through 2026. - Price risks for 2026–2028 remain skewed to the upside due to raw material import costs and exchange rate swings. On November 2, 2026, the Bank of Japan released the full version of its October 2026 Outlook for Economic Activity and Prices, as documented on [Bank of Japan](https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf). This publication follows the monetary policy gathering on October 30, 2026, where the central bank reported [holding the policy rate at 1.25%](/en/blog/boj-maintains-policy-interest-rate-october-2026). Market participants focused their primary attention on the revised baseline forecasts for economic growth and inflation across the 2026–2028 horizon compared with the previous assessment released in July 2026. Periodic revisions to macroeconomic projections establish reference points for global asset allocators. Within the framework of international [macroeconomic developments](/en/topics/macro), changes in Japanese inflation expectations and domestic demand shed light on international capital flows and foreign trade settlements. ## Macroeconomic Forecast Revisions for 2026–2028 The centerpiece of the update is an upward revision to medium-term consumer price expectations. According to Table 1 of the October 2026 Outlook Report on [Bank of Japan](https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf), the Policy Board lifted the median projection for core consumer price inflation (CPI excluding fresh food) for fiscal 2027 from 2.4% to 2.6%. The median core CPI estimate for fiscal 2026 remained unchanged at 2.5%, while the fiscal 2028 projection held steady at 2.0%. To measure the magnitude of forecast changes between official release dates, the revision spread is determined by the following formula: $$\text{Revision Spread} = \text{October 2026 Median Forecast} - \text{July 2026 Median Forecast}$$ According to data published by the BOJ, the revision spread for fiscal 2027 core CPI is calculated as: 2.6% - 2.4% = +0.2 percentage points. For core-core CPI (excluding both fresh food and energy components), the median forecast for fiscal 2027 increased by 0.1 percentage points, moving from 2.6% in the July 2026 report to 2.7% in the October 2026 release. The median core-core CPI forecast for fiscal 2028 also ticked up by 0.1 percentage points from 2.2% to 2.3% as reported on November 2, 2026. | Macroeconomic Indicator | Projection Round | Fiscal 2026 | Fiscal 2027 | Fiscal 2028 | | :--- | :--- | :---: | :---: | :---: | | Real GDP Growth | July 2026 | +0.6% | +0.8% | +0.8% | | Real GDP Growth | October 2026 | +0.7% | +0.7% | +0.8% | | Core CPI (ex. fresh food) | July 2026 | +2.5% | +2.4% | +2.0% | | Core CPI (ex. fresh food) | October 2026 | +2.5% | +2.6% | +2.0% | | Core-core CPI (ex. food & energy) | July 2026 | +2.5% | +2.6% | +2.2% | | Core-core CPI (ex. food & energy) | October 2026 | +2.4% | +2.7% | +2.3% | Real gross domestic product projections displayed mixed adjustments across consecutive fiscal years. According to earlier tables published on [Bank of Japan](https://www.boj.or.jp/en/mopo/outlook/gor2607b.pdf) compared against the latest report, real GDP growth for fiscal 2026 was upgraded by 0.1 percentage points to 0.7% (from 0.6%). Conversely, real GDP growth for fiscal 2027 was revised down by 0.1 percentage points from 0.8% to 0.7%, before aligning at 0.8% in fiscal 2028. > Chart: Comparison of median Core CPI projections in October 2026 report. %. FY 2026: 2.5; FY 2027: 2.6; FY 2028: 2.0. ## Core Drivers of the Fiscal 2027 Inflation Outlook The upward adjustment to fiscal 2027 inflation stems from persistent raw material costs combined with international technology investment. According to the analysis published on [Bank of Japan](https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf) on November 2, 2026, higher crude oil prices observed since summer 2026 elevated procurement costs for Japanese industrial manufacturers. Global demand for semiconductor equipment and artificial intelligence infrastructure expanded steadily throughout 2026, supporting firm output pricing across high-technology export sectors. As reported by [VnEconomy](https://vneconomy.vn/boj-giu-nguyen-lai-suat-tuyen-bo-chien-thang-trong-cuoc-chien-chong-giam-phat.htm) on October 30, 2026, these structural adjustments show how corporate pricing behavior and household wage expectations have shifted toward positive nominal price discovery after years of zero-inflation assumptions. Domestic labor market conditions remained tight across logistics, transport, and consumer services. According to consumer price index data released by the [Statistics Bureau of Japan](https://www.stat.go.jp/english/data/cpi/index.html) on October 23, 2026, headline CPI inflation climbed 2.5% year-on-year in September 2026. Wage increases negotiated during spring 2026 labor rounds continued to pass through into consumer service fees, dining expenses, and retail goods. ## Anchoring Underlying Inflation Around Two Percent A technical section of the October 2026 report appears in Box 5 on page 72 of the official release on [Bank of Japan](https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf), examining how underlying inflation has anchored near the central bank target. Underlying inflation measures structural trend price changes by stripping away temporary supply fluctuations and volatile food components. According to the central bank assessment published for October 2026, underlying CPI inflation rose toward 2% between 2024 and 2026 and made steady progress toward firm anchoring. Three structural mechanisms drive this transition: 1. **Sustained Positive Output Gap:** Capacity utilization rates and employment intensity remained above long-term potential levels throughout 2026, giving enterprises confidence to preserve selling prices. 2. **Labor Participation Ceilings:** Labor force entry rates for female workers and senior citizens leveled off during fiscal 2026, requiring employers to offer competitive cash earnings to retain staff. 3. **Firming Public Inflation Expectations:** According to surveys published by the BOJ in October 2026, medium- and long-term inflation expectations among households and businesses settled near 2%, moving away from zero-inflation conventions. The transmission between corporate payroll expansion and consumer spending operates through credit channels. This systemic interaction connects directly to baseline borrowing costs outlined in analyses of [policy rates and interbank rates](/en/blog/policy-rates-and-interbank-rates) and institutional liquidity aggregates discussed in [money supply and credit growth](/en/blog/money-supply-and-credit-growth). ## Upside Risk Skew and Capital Flow Dynamics Reviewing its macro risk balance, the BOJ concluded that while economic activity risks remain broadly balanced, risks to consumer prices continue to skew to the upside. According to the assessment published on November 2, 2026, on [Bank of Japan](https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf), geopolitical friction in crude oil transport corridors and foreign exchange fluctuations could elevate import procurement expenses during coming quarters. Across the Asia-Pacific region, commercial banks and trading desks monitor Japanese rate trajectories closely. According to regional policy reporting published on [Báo Điện tử Chính phủ](https://baochinhphu.vn/the-gioi-tuan-qua-phia-sau-nhung-quyet-dinh-chinh-sach-lai-suat-102261101162915399.htm) on November 1, 2026, diverging central bank stances create ongoing foreign exchange adjustments that require active international balance sheet monitoring. The October 2026 Outlook Report highlighted that baseline estimates do not incorporate proposed consumer tax reductions on food and beverages under discussion in the Japanese Diet. According to notes on page 10 on [Bank of Japan](https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf), should tax cuts take effect in fiscal 2027, the mechanical impact would trim core CPI inflation by approximately 1.3 percentage points and core-core CPI by 1.4 percentage points relative to baseline numbers. The existence of these fiscal variables reminds market analysts to evaluate incoming hard data rather than relying on fixed policy projections. ## Frequently Asked Questions ### Which inflation metric saw the largest revision? Core CPI excluding fresh food for fiscal 2027 recorded the largest upward adjustment, rising by 0.2 percentage points from 2.4% to 2.6% in the official release published on November 2, 2026. ### How did Japan real GDP growth forecasts shift? According to the October 2026 report published by the BOJ, fiscal 2026 real GDP growth was adjusted up from 0.6% to 0.7%, while fiscal 2027 was edged down from 0.8% to 0.7% on delayed raw material cost impacts. ### How does the BOJ evaluate underlying inflation? According to assessments published by the BOJ for October 2026, underlying inflation moved steadily toward 2% between 2024 and 2026 as nominal wage gains passed into consumer service fees. ## Sources - Bank of Japan: [Outlook for Economic Activity and Prices (October 2026)](https://www.boj.or.jp/en/mopo/outlook/gor2610b.pdf) (02/11/2026) - Bank of Japan: [Outlook for Economic Activity and Prices (July 2026)](https://www.boj.or.jp/en/mopo/outlook/gor2607b.pdf) (31/07/2026) - Statistics Bureau of Japan: [Consumer Price Index](https://www.stat.go.jp/english/data/cpi/index.html) (23/10/2026) - Báo Điện tử Chính phủ: [Thế giới tuần qua: Phía sau những quyết định chính sách lãi suất](https://baochinhphu.vn/the-gioi-tuan-qua-phia-sau-nhung-quyet-dinh-chinh-sach-lai-suat-102261101162915399.htm) (01/11/2026) - VnEconomy: [BOJ giữ nguyên lãi suất, tuyên bố chiến thắng trong cuộc chiến chống giảm phát](https://vneconomy.vn/boj-giu-nguyen-lai-suat-tuyen-bo-chien-thang-trong-cuoc-chien-chong-giam-phat.htm) (30/10/2026) ## Frequently asked questions ### Which inflation metric saw the largest revision? Core CPI excluding fresh food for fiscal 2027 saw the largest upgrade, rising by 0.2 percentage points from 2.4% to 2.6% in the official release on November 2, 2026. ### How did Japan real GDP growth forecasts shift? According to the October 2026 report published by the BOJ, fiscal 2026 real GDP growth was adjusted up from 0.6% to 0.7%, while fiscal 2027 was edged down from 0.8% to 0.7%. ### How does the BOJ evaluate underlying inflation? According to assessments published by the BOJ for October 2026, underlying inflation moved steadily toward 2% between 2024 and 2026 as nominal wage gains passed into consumer prices. --- _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._