BOJ Governor Ueda Hints at September Rate Hike as Inflation Risks Grow
Bank of Japan Governor Kazuo Ueda hinted at a rate hike in September as the central bank considers upside price risks and economic data that aligns with its 2% inflation target. Speaking after a meeting with G20 finance ministers and central bankers, Ueda said the BOJ's board would debate policy with these factors in mind.
The comments come as market expectations for a September rate hike have grown, fueled by US Treasury Secretary Scott Bessent's recent statements emphasizing the need for action. Overnight index swaps imply that a September hike is fully priced in, and Ueda avoided pushing back against this expectation.
Economic data has been in line with the BOJ's view, suggesting further rate increases may be necessary to manage inflation. The price trend is close to the central bank's 2% target, according to Ueda, who declined to comment on market positioning.