Bank of Japan Governor: "Will Raise Interest Rates If Inflation Improves"

"Trump 2nd Term, Economic Uncertainty Grows"

Ueda Kazuo, Governor of the Bank of Japan, stated, "If the improvement in the economic and price situation continues, we will raise the policy interest rate (benchmark interest rate) to adjust the degree of monetary easing."

According to the Nihon Keizai Shimbun (Nikkei) on the 25th, Governor Ueda said at a Keidanren (Japan Business Federation) event lecture that continuing the low interest rate policy could lead to "an excessive level of monetary easing." He added, "If the interest rate hike is delayed, the inflation rate will exceed the 2% target and accelerate, increasing the risk of being forced into a rapid interest rate hike later."

Kazuo Ueda, Governor of the Bank of Japan Yonhap News

However, regarding the specific timing of the rate hike, he was reserved, saying, "It depends on future economic, price, and financial conditions." He also pointed out, "There is significant uncertainty surrounding the economic policies of the next U.S. administration under Donald Trump."

Governor Ueda had previously stated at a press conference on the 19th, when the Bank of Japan's Monetary Policy Meeting decided to keep rates unchanged, that if the economic and price outlooks materialize as expected, "we will adjust the policy interest rate."

The Bank of Japan ended its negative interest rate policy by raising the benchmark interest rate for the first time in 17 years in March, and at the July meeting, raised the rate from 0?0.1% to about 0.25%. Subsequently, at the Monetary Policy Meetings held in September, October, and December, the interest rate was kept unchanged for three consecutive times.