Ahead of his meeting with the Japanese Financial Services Agency (FSA) and Ministry of Finance (MoF) on Wednesday, Bank of Japan (BoJ) Governor Kazuo Ueda reaffirmed the central bank‘s commitment to raising interest rates if Japan’s economic recovery continues in line with expectations.
Ueda emphasized that the BoJ will “continue to raise rates if the economy keeps improving” but also noted that the central bank would take a balanced approach, carefully examining both domestic and global risks. He pointed out the importance of considering factors such as economic conditions, price developments, and the impact of foreign markets, particularly US trade policy.
While Japan’s economy is recovering moderately, Ueda acknowledged that there are some weak signs. He stressed the need for vigilance, particularly due to the uncertainty surrounding global trade policy.
On inflation, Ueda noted that underlying inflation remains below the BoJ’s 2% target but is gradually accelerating, signaling that the central bank is closely monitoring inflationary pressures.
Market Reaction
Following Ueda’s comments, the USD/JPY pair staged a modest rebound, climbing from around 144.60 to trade at 145.40, although it remains down 0.56% on the day. The market continues to digest the BoJ’s stance amid global economic uncertainties.
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