Tokyo, October 30 (QNA) - The Bank of Japan (BOJ) kept its key interest rate unchanged at 1.25% on Friday, but raised its inflation forecast for fiscal 2027 and signaled further monetary tightening amid mounting price pressures.

The decision was taken by an 8-1 vote, with board member Hajime Takata dissenting in favor of raising the rate to 1.5%.

In its October Outlook for Economic Activity and Prices, the central bank said underlying consumer price inflation was broadly in line with its 2% price stability target and was expected to remain around that level. However, it warned that risks to the inflation outlook were tilted to the upside.

The bank raised its forecast for the consumer price index, excluding fresh food, for fiscal 2027 to 2.6%, from 2.4% in its previous projection, citing factors including the rise in crude oil prices since the summer. Fiscal 2027 runs through March 2028.

The BOJ said it would continue to raise its policy rate and adjust the degree of monetary accommodation in response to developments in economic activity, prices and financial conditions, while assessing the appropriate timing and pace of further adjustments.