BOJ Governor Signals Further Rate Hikes, Cites Inflation Risks
BOJ's Ueda vows continued rate hikes, citing accommodative conditions and inflation risks near the 2% target.
Bank of Japan (BOJ) Governor Kazuo Ueda has reaffirmed the central bank's commitment to further interest rate increases, stating that financial conditions remain accommodative. Speaking to reporters on Tuesday after the G20 finance leaders' meeting in Asheville, North Carolina, Ueda indicated that the BOJ will debate whether upside inflation risks are intensifying at its upcoming policy meeting.
Ueda noted that with underlying inflation running close to the BOJ's 2% target, the central bank must pay close attention to inflationary pressures when guiding monetary policy. However, he also stressed the need to carefully assess the cumulative impact of past rate hikes on the broader economy.
Data released since the BOJ's July meeting suggests that economic and price conditions are broadly in line with the central bank's projections, Ueda said. He emphasized that the BOJ will thoroughly examine both the baseline scenario and potential risks at its next policy meeting, scheduled for September 17-18.
When asked about market expectations that almost fully price in a rate hike at that meeting, Ueda declined to comment directly.