Bank of Japan Governor Kazuo Ueda remarked on Tuesday that the central bank can afford to monitor developments in financial markets and global economies while formulating monetary policy, indicating a lack of urgency to raise interest rates.
He expressed a desire to analyze service-price data for October, due to be released in November, to assess whether underlying inflation is progressing toward the BOJ’s 2% target, underscoring the importance of the upcoming data.
This suggests that the BOJ is likely to postpone any rate increases until December at the earliest. The central bank’s upcoming policy meeting is scheduled for October 30-31, coinciding with a quarterly assessment of growth and inflation projections.
The governor reaffirmed commitment to raising rates in the event of accelerating inflation in line with the 2% target and cautioned about potential risks, including volatile financial markets and uncertainties surrounding the U.S. economy’s prospects of achieving a soft landing.
The BOJ’s recent actions involved discontinuing negative interest rates in March and raising short-term rates to 0.25% in July, marking a significant departure from a prolonged stimulatory program aimed at stimulating inflation and economic expansion.
