Bank of Japan Governor Ueda Kazuo (植田和男) said that financial conditions remain accommodative even as underlying inflation approaches 2%, and indicated that the Bank will continue raising the policy rate. He was on a business trip to Bangkok, Thailand, and the deputy governor read out the greetings.
Bank of Japan Governor Ueda Kazuo (植田和男) said that financial conditions remain accommodative even when the underlying inflation rate approaches 2%, and reiterated the Bank's policy of continuing to raise interest rates. He said that stabilizing underlying inflation at around 2% would be important, based on the outlook that economic activity, prices and financial conditions would develop in line with the Outlook for Economic Activity and Prices report.
He cited developments in the Middle East, expansion in AI-related demand and exchange-rate fluctuations as risk factors, and emphasized the need to contain the risk that these factors could cause underlying inflation to overshoot excessively. He said that the policy's major objective was to stabilize underlying inflation without allowing it to rise.
He said that the timing and pace of policy adjustments would be considered while examining the likelihood of the economic and price outlook being realized and the associated risks. Regarding the level of the neutral interest rate, he said there was no specific basis for determining it.