BOJ Governor Ueda Kazuo (植田 和男) emphasized a “change in phase” as underlying inflation approaches 2%. He indicated that monetary policy is entering the final stage of rate hikes toward a neutral interest rate range of 1.75%–2.0%.
BOJ Governor Ueda Kazuo (植田 和男) indicated that the phase of monetary policy is changing, following the decision at the September monetary policy meeting to raise the policy rate to 1.25%. As underlying inflation approaches 2%, the importance of stabilizing it at around 2% has been emphasized.
Statements and remarks made from that day onward have also repeatedly expressed the need to stabilize underlying inflation at around 2%, while warning of the risk that it could overshoot above 2%. This has raised awareness of a return to conventional monetary policy centered on containing inflation.
In presenting the idea of a change in phase, Governor Ueda Kazuo (植田 和男) recognizes that the final stage of rate hikes toward the neutral rate is becoming a realistic prospect. Looking ahead, the view has been suggested that, following an additional rate hike in December, the area around the neutral range of 1.75%–2.0% could become the long-term settling point.
The author’s view is that the range is assumed to be reached by fiscal 2027, emphasizing a change in phase aimed at achieving both price stability and monetary policy normalization.