BOJ Governor Ueda Suggests Serious Debate on Interest Rate Hike This Month

Bank of Japan (BOJ) Governor Kazuo Ueda has sent out a cautious but suggestive message to markets that he and his colleagues will have a serious debate on whether to raise interest rates this month.

In a news conference, Ueda said data released since the BOJ's last meeting had been 'largely in line' with the growth and inflation outlook provided by the board in its quarterly report.

The BOJ maintained its projection that Japan's economy should be back on a modest growth pace of just under 1% in 2027, backed by fiscal programs, 'accommodative' financial conditions and global demand linked to artificial intelligence.

Ueda repeated comments he made on July 31 and his deputy Ryozo Himino on August 27 that the BOJ board will consider the timing and pace of rate adjustment based on the likelihood of the baseline scenario of the outlook for economic activity and prices being realized, and the risks to the outlook.

The BOJ decided to leave the target for the overnight interest rate at 1% in an 8 to 1 vote in July after raising it from 0.75% in a 7 to 1 vote in June.