Meiji Yasuda Research Institute senior economist Kazutaka Maeda said the Bank of
Japan's Outlook for Economic Activity and Prices shows the BOJ is increasingly
concerned about upside risks to inflation and economic activity. The report
upgraded wording on exports and capex, citing AI-related demand as a support.
While the BOJ's inflation projections remain broadly consistent with a 2%
target, Maeda said the bank appears more aware inflation could exceed that
level. The BOJ may drop its previous assumption of hikes every six months and is
considering shortening the interval to about three months, making a rate
increase at the December meeting a realistic possibility.
