BOJ Governor Reaffirms Commitment to Maintaining 'Interest Rate Hikes' Policy

"Wages and Prices Expected to Rise...
Interest Rate Hikes to Follow Accordingly"

Kazuo Ueda, Governor of the Bank of Japan (BOJ), has reaffirmed his stance to maintain a policy of raising interest rates.

Kazuo Ueda, Governor of the Bank of Japan (BOJ). Photo by AFP

According to the Nihon Keizai Shimbun on January 5, Governor Ueda attended the New Year's gathering of the Japanese Bankers Association held in Tokyo that day and stated, "There is a high possibility that the mechanism by which wages and prices rise moderately together will be maintained." He added, "If the economic and price outlook is realized, we will continue to raise the policy interest rate accordingly."

Governor Ueda explained that such appropriate adjustments "will smoothly achieve the price stability target while also leading to sustained economic growth." Reflecting on last year's economic situation, he said, "Corporate profits faced downward pressure due to U.S. tariff policies, but the moderate recovery trend continued," adding, "It was a year that demonstrated the resilience of the economy."

On December 19 last year, the Bank of Japan raised its benchmark interest rate from around 0.5% to around 0.75% at the Monetary Policy Meeting, an increase of 0.25 percentage points. This marks the highest level in 30 years since 1995.