BOJ's Ueda Pledges Further Rate Hikes Amid Inflation Risks
Bank of Japan Governor Kazuo Ueda has reaffirmed his commitment to raising interest rates to combat still-accommodative financial conditions. Speaking in Asheville, North Carolina, on September 1st, Ueda stated that he hoped to discuss with the board this month whether the likelihood of the BOJ's economic scenario materialising was heightening and whether upside price risks were increasing.
The remarks came after a meeting between Ueda and US Treasury Secretary Scott Bessent, who called for 'decisive' monetary steps to combat the weak yen. While Ueda did not comment on what was discussed during the meeting, he confirmed that the BOJ would continue to assess the cumulative impact of rate hikes on the economy.
The BOJ raised interest rates to a 31-year high of 1% in June and kept them steady in July, signalling a strong chance of a near-term hike due to mounting price pressures from the Middle East war and a weak yen. Ueda emphasized that the BOJ would scrutinize upside price risks from various factors, including the conflict in the Middle East, robust AI-related demand, and inflation from a weak yen.