Bank of Japan (BoJ) Governor Kazuo Ueda stated on Thursday that Japan’s real interest rates remain very low, and the central bank will continue to raise rates if the economic outlook aligns with its projections. Ueda noted that Japan’s economy is recovering moderately, though there are some signs of weakness.
Ueda emphasized that while Japan’s economy and prices are generally moving in line with BoJ forecasts, the central bank must remain vigilant due to increasing uncertainty, particularly from global trade policies. He warned that the U.S. tariff policies could have significant effects on Japan’s economy, exerting downward pressure on both the domestic and global economic landscapes, though the exact impact on prices remains unclear.
The BoJ Governor also highlighted the stability of Japan’s financial system and reiterated the central bank’s commitment to raising interest rates if the economic and price conditions continue to develop as anticipated. Ueda further noted that the BoJ will assess the situation carefully at each policy meeting without preset expectations, closely monitoring wage trends, inflation, and the impact of U.S. policies.
Regarding inflation, Ueda pointed out that underlying inflation is gradually approaching the BoJ’s 2% target, with labor market tightness and rising inflation expectations contributing to this trend. However, he cautioned that prolonged food inflation could shift inflation expectations, prompting a reassessment of monetary policy.
Ueda stressed that the BoJ has already adjusted its monetary easing appropriately and will continue making decisions based on achieving stable 2% inflation. He also noted that keeping rates too low while inflation accelerates could lead to the need for rapid rate hikes in the future.
At the time of writing, the USD/JPY was trading 0.47% higher, reaching 142.57.
Related Topics:
Current Yen Exchange Rate: What Is 25000 Yen to Dollar?
Current YEN Exchange Rate: What Is 500 Japanese Yen to USD?
Current YEN Exchange Rate: What Is 1000 JPY to GBP?
