Bank of Japan Governor Ueda
Bank of Japan Governor Kazuo Ueda said on Monday that the central bank remains on track to raise interest rates further if its projections for economic activity and inflation continue to unfold as expected, while stressing that any tightening would preserve broadly accommodative financial conditions.
Ueda said overseas economies have shown “some weakness” but are still “gradually increasing as a whole,” adding that the feared fallout from U.S. tariff policies has so far not materialised to a significant degree. Even so, he reiterated the BOJ’s view that global growth is likely to slow temporarily under the weight of trade measures.
He described future rate increases as a process of “easing off the accelerator” rather than hitting the brakes, arguing that Japan’s economy has been recovering moderately despite patches of softness. The likelihood of the BOJ’s baseline scenario for growth and inflation being realised is “gradually increasing,” he said.
Ueda also emphasised the importance of assessing whether firms’ active wage-setting behaviour will continue, with particular attention on the momentum heading into next year’s Shunto spring wage negotiations. He said the recent dip into negative GDP growth is expected to be temporary.
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The yen has been climbing all morning ion Tokyo ahead of this speech, and its moving higher still. Ueda does sound like a man intent on a rate hike at the December 18-19 meeting here, make you wonder how much of this was in the market prior to his speech. In the Japanese market that is. It often seems like a leaky sort of place, yeah?
This article was written by Eamonn Sheridan at investinglive.com.