At the House of Representatives Budget Committee, BOJ Governor Ueda Kazuo (植田 和男) reaffirmed that the underlying rate of price increases was quite close to 2%. He expressed the view that stabilizing underlying prices at around 2% represents an important phase for monetary policy.
Governor Ueda indicated that underlying prices were quite close to 2% as the mechanism of gradual increases in wages and prices became established. He expressed his view that stability in future policy operations should be prioritized.
The BOJ raised its policy rate to 1.25% at its September monetary policy meeting, and the governor said at a press conference that the policy phase had changed, indicating a positive stance toward further rate hikes. The Diet testimony reaffirmed the guidelines for future policy operations.
As for the market outlook, the interest-rate swap market is pricing in an approximately 87% probability of an additional rate hike by December. Regarding the government bond market, he expressed the view that long-term interest rates are fundamentally determined by the market and indicated that the BOJ would continue to monitor developments in the government bond market.
Details of these remarks are provided as an additional update based on the original Bloomberg report.