BOJ's Ueda reaffirms rate hikes to keep inflation near 2%
Japan's central bank will issue new growth and inflation forecasts at its October 29-30 meeting, following rate increases in June and September.
BOJ's Ueda stresses inflation risks ahead of October policy meeting
Japan's central bank governor said Middle East tensions, AI-related demand and currency movements could push underlying inflation above its 2% target.
Bank of Japan Governor Kazuo Ueda said on October 16 that keeping underlying inflation near 2% had become increasingly important, reiterating the risk that price pressures could exceed the central bank's target.
Deputy Governor Shinichi Uchida delivered Ueda's speech to a gathering of Japanese credit unions. Ueda identified Middle East tensions, demand linked to artificial intelligence and exchange-rate fluctuations as factors that could influence Japan's economy and prices. He emphasized preventing an inflation overshoot from damaging the economy.
The remarks largely echoed Ueda's comments earlier in October. They preceded the BOJ's policy meeting on October 29 and 30, when it is due to publish updated quarterly forecasts for growth and inflation. Market participants will examine those projections for indications of when another interest-rate increase might come.
The BOJ has raised its benchmark rate to the highest level in 31 years and signaled a shift toward guarding against above-target underlying inflation, pointing to the prospect of tighter policy.