FX.co ★ BoJ’s Ueda Signals Readiness to Hike Rates Further

Bank of Japan Governor Kazuo Ueda confirmed on Wednesday that there has been no alteration in the BoJ’s willingness to continue increasing interest rates, provided that the economy and price trends align with expectations. This statement came after his meeting with Prime Minister Shigeru Ishiba, marking their first discussion since February. These meetings are part of routine dialogues focused on economic and market conditions. The central bank, having concluded its prolonged decade-long stimulus last year, raised short-term interest rates to 0.5% in January as it anticipated Japan edging closer to its 2% inflation target. Nonetheless, political instability presents potential challenges, as Prime Minister Ishiba faces pressure to resign following the LDP’s loss in the July upper house election. The party will decide next week whether to conduct a leadership election. Regarding the yen, Ueda emphasized that it is "preferable for currency rates to remain stable and reflective of economic fundamentals," and noted that the BoJ would vigilantly observe foreign exchange movements while maintaining coordination with the government.