BOJ's Kazuo Ueda Calls for Quick Rate Hike to Combat Negative Real Interest Rates

BOJ Monetary Policy Committee member Kazuo Ueda has called for a quick rate hike in Japan, citing the need to address negative real interest rates. Speaking on September 10, Ueda stated that Japan is no longer in a deflationary state and that the central bank must act swiftly to normalize policy rates.

The market widely expects the BOJ to raise rates by 25 basis points to 1.25% at next week's policy meeting, with some traders betting on another hike in October. U.S. Treasury Secretary Janet Yellen has expressed her understanding of the BOJ's next steps, further reinforcing market expectations.

Ueda's hawkish remarks have been seen as a signal that the BOJ may increase the frequency of rate hikes to once every three months. This is reflected in the bond market, where Japan's 10-year government bond yield has surpassed 3%, reaching a nearly 30-year high.