Bank of Japan (BoJ) Governor Kazuo Ueda stated on Thursday that underlying inflation remains slightly below the central bank’s 2% target. His comments suggest that while inflation is expected to pick up gradually, the BoJ remains cautious in its policy adjustments.
Key Takeaways from Ueda’s Remarks:
Underlying inflation is still below the 2% target but is expected to rise as the economy recovers.
The BoJ is gradually reducing the size of its balance sheet and will carefully assess the ideal level, considering global examples.
Japan’s monetary base and balance sheet are currently oversized, prompting a slowdown in bond purchases.
Real wages and consumption are expected to improve as import cost pressures ease and wage growth remains strong.
Market Reaction:
Following Ueda’s comments, the USD/JPY edged up slightly, trading 0.03% higher at 148.20. Investors continue to monitor the BoJ’s policy stance for further signals on potential monetary tightening.
Related Topics:
