Ueda Strikes Cautious Tone on Future BoJ Rate Hikes

Bank of Japan Governor Kazuo Ueda delivered his first major public remarks since the central bank raised its policy rate to 1.25% in September. Speaking at the National Securities Convention in Tokyo, Ueda emphasized that financial conditions remain accommodative and supportive of economic activity despite the recent rate hike. He noted that Japan's economy is recovering moderately, though some weaknesses persist, and business sentiment is favorable.

Ueda stated that the BoJ will continue to adjust its policy in response to economic conditions and inflation trends. The pace and timing of future rate hikes will depend on whether the bank's baseline projections materialize and the associated risks. He did not hint at a second consecutive rate increase at the upcoming October policy meeting, though traders will be closely watching for any signals.

Some BoJ officials are cautious about raising rates too quickly, according to sources. The bank may indicate at the October meeting that underlying inflation has roughly reached its 2% target. The September rate hike marked the first increase in 15 years, and the central bank remains focused on balancing economic recovery with inflation control.