BOJ Governor Hints Uncertain Global Outlook as Inflation hits 2%

Bank of Japan (BOJ) Governor Kazuo Ueda emphasized the need to focus on the economic impact of unstable markets and overseas risks, signaling that the central bank is not in a rush to further raise interest rates. While Japan's economy is recovering moderately, Ueda noted that inflation is gradually approaching the BOJ’s 2% target. However, uncertainties surrounding both the domestic recovery and the global economic outlook remain high, with particular attention paid to the situation in the United States and ongoing market volatility.

In his speech, delivered by Deputy Governor Shinichi Uchida, Ueda highlighted that the BOJ will continue to closely monitor global developments and their effects on Japan’s economic trajectory. He stressed the importance of vigilance in assessing whether Japan can sustainably achieve its inflation target amid these uncertainties.

Earlier this year, the BOJ raised its short-term policy rate to 0.25% after ending negative interest rates in March, in line with its view that Japan was on track to meet its inflation goal. However, Ueda underscored that any further rate hikes will depend on whether inflation continues to stay on target, factoring in global economic risks and Japan’s fragile recovery.