BOJ Governor Warns of Inflation Risk Amid Stable Economic Outlook

Bank of Japan Governor Kazuo Ueda emphasized the need to pay close attention to inflation risk, stating that it is 'more necessary than ever' to monitor potential price increases. Speaking after a central bank meeting on July 31st, Ueda noted that underlying inflation is expected to remain consistent with the BOJ's 2% target from the second half of fiscal 2026 through the next fiscal year.

However, he warned of a risk that prices could rise above this target. If such an event were to occur, it would have adverse impacts on the economy, according to Ueda. The BOJ's failure to stabilize prices and subsequent sharp increase in policy rates would also negatively affect investment growth, he said.