BoJ’s Ueda: Accommodative monetary policy to continue

In today’s parliamentary address, BoJ Governor Kazuo Ueda reaffirmed the Bank of Japan’s stance on continuing its accommodative monetary policy, underscoring the short-term interest rate as the “primary policy tool.”

A key focus for BoJ, as Ueda noted, is the scrutiny of trend inflation’s progress towards 2% target in judging “appropriate degree of monetary support.”

Meanwhile, Ueda clarified that BoJ would not alter its monetary policy solely in response to FX fluctuations. However, he acknowledged that significant FX movements, if they lead to an unexpected increase in import prices and thereby risk elevating trend inflation beyond projections, could necessitate a reassessment of monetary policy.