Ueda says BOJ to keep focus on anchoring inflation at 2%
The governor's message, read out by his deputy, repeats a stance he has held since September's rate rise
Published
Bank of Japan Governor Kazuo Ueda said the central bank's focus from here is on entrenching 2% inflation, in a speech delivered on October 16 to a meeting of Japanese credit unions. Ueda did not deliver the remarks himself; they were read out by Deputy Governor Shinichi Uchida, Reuters reported.
The speech flagged that tensions in the Middle East, AI-related demand and currency swings could push underlying inflation above the BOJ's 2% target, according to Reuters. The central bank raised its policy rate to 1.25% last month, a 31-year high. The yen was trading marginally lower near 157.88 per dollar as the speech was read, FXStreet reported.
Traders had been betting on a pause at this month's meeting despite that run of comments. Separately, Bloomberg has reported that cooling producer prices have added to bets the BOJ will skip a hike at its October 29-30 meeting, where new quarterly forecasts are due.
Ueda's framing restates the data-dependent, no-preset-path stance he has held since the September increase, rather than signalling new urgency. Markets have largely absorbed that message already, through the string of similar comments and the Tokyo CPI reading that showed core-core inflation at 3.0% on October 1, which has kept Japanese long-term yields near their late-September multi-decade highs. Reports that the BOJ is unlikely to hike again this month suggest officials see current policy as consistent with the inflation goal without need for immediate action. The yen-funded carry trade, the main channel linking Japanese policy to US rate markets, continues to depend on the pace of future hikes rather than on restatements of the inflation target itself.