Ueda Signals Further BOJ Rate Hikes as Inflation Nears Target
The governor said anchoring inflation is now a central policy goal ahead of the BOJ’s October meeting and updated forecasts.
Key takeaways
- Ueda reaffirmed the BOJ’s resolve to keep raising interest rates.
- The BOJ will release fresh growth and inflation forecasts at its October 29-30 meeting.
- Ueda said global policymakers saw AI-related demand as stronger than the BOJ expected.
Bank of Japan Governor Kazuo Ueda reaffirmed the central bank’s resolve to keep raising interest rates, saying it aims to anchor underlying inflation around 2% and prevent it from accelerating further. He said economic and price trends were broadly in line with the BOJ’s projections.
Speaking in Bangkok on Friday, Ueda said the BOJ would consider inflation anchoring at its next policy meeting. The board meets October 29-30 and will release fresh quarterly growth and inflation forecasts, which will be watched for clues on the pace and timing of future rate increases.
The BOJ’s policy rate was 1.25% after increases in June and September. Many BOJ policymakers prefer to hold rates at the October meeting while they assess the effects of earlier hikes, Reuters reported, citing sources.
Ueda said global policymakers saw AI-related demand as stronger than the BOJ had expected. Discussions at this week’s IMF meetings also highlighted inflation risks tied to the AI boom, while analysts cited high energy costs and rising import prices linked to a weak yen.
US Treasury Under Secretary Erin Browne urged Japan to continue tightening monetary policy, saying it should reflect that the country no longer faces a deflationary environment.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
