BOJ’s Ueda Signals Continued Rate Hikes

Bank of Japan Governor Kazuo Ueda says Japan’s underlying inflation is close to the 2% target, making it increasingly important to keep price increases anchored around that level. He has signaled the BOJ will continue raising its policy rate as economic and price conditions warrant, while noting that financial conditions remain accommodative and that inflation should not rise further. Ueda cited tight labor markets, recovering wages and prices, strong AI-related demand supporting investment and exports, and energy costs and currency movements among the forces shaping inflation. The BOJ is monitoring those risks and the effects of previous rate increases as it considers its outlook at its October 29–30 meeting; markets largely expect rates to remain unchanged this month, with a later move still possible. Ueda also said the central bank will assess long-term bond-market conditions before deciding whether intervention is needed, while maintaining its approach to reducing bond purchases.