BOJ's Ueda Pledges Further Rate Hikes Amid Inflation Risks

Bank of Japan Governor Kazuo Ueda has announced that he will continue to raise interest rates to adjust still-accommodative financial conditions. He also stated that the BOJ will debate this month whether upside inflation risks are heightening, which could keep alive the chance of a September rate hike.

In a recent news conference, Ueda said the BOJ hopes to discuss with the board this month whether the likelihood of the BOJ's economic scenario materialising is increasing and whether upside price risks are increasing. These factors are prerequisites for further rate increases.

The BOJ has raised rates five times so far, and Ueda acknowledged that they need to carefully assess the cumulative impact on the economy. He also mentioned that having set policy mindful of upside risks to inflation, the BOJ will scrutinise whether the economy and prices are moving in line with their baseline scenario, as well as risks.

The BOJ raised interest rates to a 31-year high of 1% in June, on the view that Japan was on the cusp of durably hitting its 2% inflation target. The next policy meeting is scheduled for September 17-18.