In its October "Outlook for Economic Activity and Prices" report, the Bank of Japan (BOJ) stated that it expects the year-on-year growth rate of the consumer price index (CPI), excluding fresh food, to accelerate to a level significantly above 2%. This acceleration is primarily attributed to factors such as the pass-through of wage increases, rising crude oil prices, global AI-related demand pushing up semiconductor prices, and the depreciation of the Japanese Yen. The report noted that thereafter, as the impact of elevated crude oil prices wanes, the growth rate is projected to return to around 2% in the latter half of the forecast period. The BOJ slightly raised its CPI growth forecast for fiscal year 2027 and warned that the risks to the CPI outlook are skewed to the upside, with a potential for inflation to deviate upwards from the 2% target.