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

The Bank of Japan has declared that its long-standing 2% inflation target has been reached, according to the Financial Times, marking a symbolic milestone after decades in which Japan struggled with deflation and persistently weak price growth.

The significance lies less in a single inflation reading than in what it signals about the durability of price pressures in the world's fourth-largest economy. For years, the BOJ maintained ultra-loose monetary policy, including negative interest rates and large-scale asset purchases, on the argument that inflation had not become self-sustaining. A formal acknowledgment that the goal has been met invites scrutiny of whether that policy framework may now shift. Markets have long watched the BOJ for signs of normalization, given the yen's sensitivity to interest-rate differentials and the global reach of Japanese capital flows.

What to watch: whether the BOJ treats the milestone as durable or temporary, how wage growth and services prices evolve, and any change in forward guidance. The central bank has historically moved cautiously, so the pace of any policy adjustment—rather than the declaration itself—is likely to matter most for investors.