BOJ Chief Flags Upside Inflation Risks

Bank of Japan Governor Kazuo Ueda says underlying inflation has generally reached the bank’s 2% target, but warns that risks are tilted upward and that keeping inflation near the target will require careful monetary policy. Rising energy costs are already feeding into consumer prices, which Ueda expects to accelerate into early next year, while wage growth is broadly consistent with 2% inflation; he cautioned that the target has not yet become a social norm in Japan. Minutes from the BOJ’s September meeting show most policymakers also saw a risk that underlying inflation could rise above 2% and supported raising interest rates. Ueda said the bank is monitoring other central banks closely and could consider further rate increases while remaining alert to the risk of overshooting.