The Bank of Japan (BOJ) released its October Outlook Report, raising its forecast for CPI (excluding fresh food) for fiscal year 2027 from 2.4% to 2.6%, while keeping the fiscal year 2026 CPI forecast unchanged at 2.5%. The report anticipates that risks to economic activity are roughly balanced, while price risks lean to the upside, with the potential for rising medium-to-long-term inflation expectations and core CPI inflation possibly deviating above the 2% target. The BOJ expects the economy to grow moderately but at a slower pace in fiscal year 2026, with a moderate recovery in growth starting from fiscal year 2027, as the negative impact of high energy and raw material prices diminishes and the virtuous cycle from income to spending strengthens.