BoJ Chief Signals Further Rate Hikes To Prevent Sharp Inflation

Bank of Japan Governor Kazuo Ueda has highlighted the necessity of raising interest rates to curb sharp inflation and support long-term economic growth.

Speculation has grown that the BoJ might increase borrowing costs as early as December. I Photo:  首相官邸ホームページ

His remarks have fueled market expectations of another rate hike, as reported by Kyodo News. Ueda stated in a speech that the BoJ would continue to raise its policy rate if economic and price trends align with expectations.

He also noted the central bank's close monitoring of the yen’s weakening, which has been exacerbated by the dollar rally following Donald Trump's victory in the U.S. presidential election.

Speculation has grown that the BoJ might increase borrowing costs as early as December, though Ueda emphasized that decisions would be made on a meeting-by-meeting basis, reflecting the latest economic assessments.

“I believe that gradually adjusting the degree of accommodation, in line with improvements in economic activity and prices, will support long-term economic growth and help achieve the price stability target in a sustainable manner,” Ueda told business leaders in Nagoya, central Japan.

He warned that failing to make such adjustments could lead to a scenario where inflation accelerates rapidly, forcing the BoJ to implement sharp rate hikes in the future. Ueda reiterated these concerns during a press conference later in the day, as reported by Mainichi Japan.