BOJ's Ueda Flags More Rate Hikes as Inflation Concerns Grow
Bank of Japan Governor Kazuo Ueda has signaled that more rate hikes could be on the horizon, as he emphasized the importance of carefully monitoring inflation. In a recent statement, Ueda noted that Japan's financial conditions remain 'accommodative', indicating that there is room for further tightening.
The BOJ will meet again on September 17-18 to discuss policy, and Ueda's comments suggest that policymakers will be closely watching the trajectory of inflation. He highlighted that underlying inflation is 'quite close' to the BOJ's 2% target, but emphasized the need to pay attention to upside risks.
The BOJ must balance the risk of tightening too quickly with the potential for growth and prices to be affected by past hikes. Ueda noted that policy works with a lag, so policymakers will weigh both the baseline outlook and the risks 'thoroughly' in September.