BoJ Governor Kazuo Ueda has once again underscored the central bank’s commitment to maintaining its ultra-loose monetary policy, emphasizing the need for patience in the face of uncertain inflation dynamics.
Speaking to the parliament, Ueda noted, “Trend inflation is likely to gradually accelerate toward our 2% inflation target through fiscal 2025. But this needs to be accompanied by a positive wage-inflation cycle.”
“Uncertainty on whether Japan will see such a positive wage-inflation cycle is high,” he added.
Addressing the behavior of 10-year JGB yields, Ueda expressed that he does not foresee a sharp rise above the 1% reference level, even under upward pressure.
Looking ahead, Ueda clarified the bank’s position on potentially ending its Yield Curve Control and negative interest rate policies, stating, “We will consider ending YCC, negative rate if we can expect inflation to stably, and sustainably hit the price target.”
He added that the order of adjustments to the policy would be contingent on various factors, including economic conditions, price movements, and market developments.
