Kazuo Ueda, Governor of the Bank of Japan, stated that he will not push for an interest rate hike until the economy has fully recovered.
His remarks indicate that Japan’s ultra-low interest rates are likely to continue for the time being.
Markets are now leaning toward expectations of continued monetary easing rather than further tightening.
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Kazuo Ueda, Governor of the Bank of Japan (BOJ), stated in a recent press briefing that “no interest rate hikes will be implemented until Japan’s economy is on a stable recovery path.” This suggests the central bank is more focused on economic support than monetary tightening.
He emphasized that “achieving stable inflation targets requires a sustained rise in wages and consumer spending.” Although the BOJ ended its negative interest rate policy earlier this year for the first time in 17 years, it has refrained from further rate hikes since.
This statement reaffirms Japan’s intention to diverge from the global trend of high interest rates and persistent monetary tightening. With the yen weakening and import prices rising, Japan’s monetary policy is attracting heightened attention from global markets.
Some market analysts warn that Japan’s prolonged low-interest policy could further weaken the yen and potentially suppress domestic consumption due to increased import costs.
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