BOJ Governor Warns on Inflation Risk: Vigilance Needed Now More Than Ever

Bank of Japan Governor Kazuo Ueda has emphasized the need for vigilance against rising inflation, stating it is 'more necessary than ever' to pay attention to this risk. In a press conference following the central bank's decision to keep its monetary policy unchanged, Ueda noted that underlying inflation is expected to remain consistent with the 2% price stability target from the second half of fiscal 2026 through the next fiscal year.

However, he also highlighted the possibility of inflation exceeding this target, underscoring the importance of closely monitoring prices and their potential impact on the economy. Ueda stressed that if the BOJ fails to stabilize prices, it could be forced to raise its policy rate sharply, which would negatively affect investment in healthy growth.

The BOJ will thoroughly discuss these risks at its next and later policy-setting meetings, according to Ueda. His comments underscore the central bank's continued focus on inflation management and its potential implications for monetary policy.