MNI BRIEF: BOJ To Focus On Evolving Prices And Spending

The full text of the Bank of Japan’s October Outlook Report warned that food prices remain highly sensitive to weather, global commodity markets and exchange-rate movements, requiring close monitoring for their impact on private consumption.

The warning could undermine the BOJ’s baseline view that consumption will return to a moderate increasing trend as food price gains slow.

“Regarding the outlook in the baseline scenario, as the rate of increase in food prices decelerates, private consumption is projected to return to a moderate increasing trend,” the report said.

The BOJ cautioned, however, that “prices have continued to rise, mainly led by food prices, which are daily necessities, and this has had a clear impact on households’ consumption activity.”

High-frequency retail data showed that household thriftiness has increased notably since early 2025, when food price rises intensified.

 The report added that weak consumption among people aged 60 and over reflects both limited benefit from wage gains and a higher share of food in their spending, meaning inflation hits their consumption more directly.