BOJ Governor Ueda Reaffirms Gradual Rate Hikes as Underlying Inflation Nears 2% Target

Bank of Japan Governor Kazuo Ueda reiterated on October 16 that the central bank will continue raising its policy interest rate in response to developments in economic activity, prices, and financial conditions, signaling that the existing tightening path remains intact. Ueda said financial conditions remain accommodative and that underlying inflation is approaching the BOJ's 2% price stability target, adding that stabilizing the price trend around that level is increasingly vital.

The remarks, delivered in Tokyo, stopped short of telegraphing an imminent move and did not push back on market expectations that the BOJ would skip a back-to-back hike at its October meeting. Reports from earlier in the week indicated BOJ officials were leaning against consecutive rate increases at this month's gathering, preferring instead to examine further data before considering another move as soon as December.