BOJ Sets Sights on Inflation Risks Ahead of Decision

Bank of Japan Governor Kazuo Ueda has announced that the central bank will consider stronger-than-expected inflation when making its policy decision on September 18. Speaking alongside Finance Minister Satsuki Katayama, Ueda emphasized the importance of managing risks as underlying inflation draws closer to the BOJ's 2% target.

Ueda noted that the economic data have been in line with the bank's projections, but he declined to comment on market positioning. The governor has stressed careful messaging since a July 2024 hike surprised some traders and stirred volatility.

The jump in Japan's 10-year government bond yield to 3%, a three-decade high, is seen as reflecting global trends rather than concerns about the country's fiscal position. With swaps already indicating a rate increase later this month, the BOJ's decision on September 18 will be closely watched.