Kazuo Ueda, Governor of the Bank of Japan, said regarding additional interest rate hikes, "It can be said that we are getting closer in the sense that the data is changing as assumed," according to a report by Nihon Keizai Shimbun on the 30th.
According to the report, Governor Ueda stated in an interview with Nihon Keizai Shimbun on the 28th, "If the certainty that the inflation rate steadily rises toward 2% increases, we will adjust the degree of monetary easing at an appropriate timing."
The Bank of Japan ended its negative interest rate policy by raising the short-term policy rate, which corresponds to the benchmark interest rate, for the first time in 17 years in March, and raised the rate again in July from 0-0.1% to around 0.25%. There are market expectations that the Bank of Japan will raise the rate to 0.5% around January next year.
However, Governor Ueda said that the decision on whether to raise rates in the future will be made considering wages and U.S. economic policies. He said, "I want to see what kind of momentum the spring 2025 labor-management negotiations will bring," adding, "There is a big question mark about how U.S. economic policy will unfold."
Additionally, Governor Ueda commented on the yen-dollar exchange rate rising to 161 yen in July, stating that an excessive depreciation of the yen could pose a risk to the Japanese economy. He added that if the yen's depreciation progresses rapidly, the Bank of Japan will respond by changing monetary policy accordingly.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
