Bank of Japan Governor

Rate Hikes Depend on Strong Economic Expectations, Positive Developments in Wages and Inflation

In statements made on Monday morning, Bank of Japan (BoJ) Governor Kazuo Ueda emphasized
that the Japanese economy is showing signs of moderate recovery despite some signs of weakness in specific sectors.
Ueda stressed that the central bank will gradually raise interest rates once strong economic expectations are met,
focusing on supporting sustainable growth and moderate inflation.

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Ueda clarified that the BoJ is carefully monitoring various risks that may affect economic expectations,
including developments in the U.S. economy.
He noted that rising spending is gradually supporting a positive cycle between wages and inflation,
with income levels increasing in both corporate and household sectors.

Ueda highlighted the importance of observing upcoming wage negotiations,
pointing out that sustainable wage increases will play a crucial role in achieving the bank’s inflation targets.
He also urged companies to pass on higher labor costs by raising prices for goods and services,
stating that such measures are essential for boosting productivity and achieving sustainable increases in real wages.

The governor discussed challenges facing the Japanese economy,
including slowing growth in China and developments in U.S. economic policy under President-elect Donald Trump.
He underscored the importance of monitoring volatile markets and their impact on Japan’s economy and domestic prices.

Ueda stated that core inflation is expected to rise moderately, with increasing prospects for a soft economic landing.
However, he reiterated the BoJ’s commitment to supporting economic activity
while gradually easing its accommodative monetary policies when conditions allow.

These statements come at a time when expectations for gradual rate hikes in Japan are growing,
amid rising inflationary pressures and anticipated wage increases.
With a focus on sustainable economic growth,
the BoJ aims to achieve internal economic stability while taking into account major global shifts.

Bank of Japan Governor

Bank of Japan Governor

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