# Japan's Slow Exit From Cheap Money

The Bank of Japan keeps its policy rate below inflation, so imported energy inflation and yen weakness recur, and each step toward normalization tightens the yen funding that global carry positions depend on.

- Conviction: 40 / 100 (forming)
- Horizon: Emerging (watchlist)
- Tracking since: 2026-10-24T00:00:00.000Z
- Last updated: 2026-10-24T06:32:39.659Z
- Canonical: https://polylog.news/trends/boj-normalization-carry-risk
- Publisher: Polylog
- Affected regions: Global, United States

## Recent evidence

- [confirms] Japan's Core Inflation Rises to 2.1%, Above the Bank of Japan's Target for the First Time in Nine Months (2026-10-24): Japan's core inflation rose to 2.1%, above the BoJ target for the first time in nine months, while the policy rate stays at 1.25% ahead of the October 29-30 meeting. That keeps real rates negative and the case for another normalization step live, and each step tightens the yen funding that carry positions depend on.