BoJ’s Ueda signals no rush to hike rates amid global uncertainties

In a speech today, BoJ Governor emphasized that the central bank will need to thoroughly assess factors such as financial and capital market developments both domestically and internationally, as well as the broader global economic environment. Importantly, Ueda indicated that there is “enough time” to make these evaluations, suggesting that BoJ is not in a hurry to raise interest rates again.

Ueda reaffirmed BoJ’s commitment to adjusting its policy based on its economic and inflation outlook, stating that if the projections in the Outlook Report are met, the BoJ would indeed raise the policy interest rate. However, he also stressed the unpredictability of the current environment.

“Given the high uncertainties surrounding economic activity and prices, unexpected situations may occur,” Ueda noted, adding that policy actions will need to be timely and flexible rather than adhering to any “fixed schedule.”

Ueda further commented on Yen, noting that the recent one-sided depreciation has been partially retraced since August. This, along with a slowdown in the rise of import prices, has reduced the upside risk to inflation driven by higher import costs.

Full speech of BoJ’s Ueda here.