BoJ Governor Kazuo Ueda reiterated in a speech today that the central bank remains committed to its gradual policy tightening path, conditional on the realization of its economic and price outlook. However, the timing of adjustments will depend on evolving “economic activity and prices” as well as “financial conditions.”
Ueda stated that monetary policy decisions would hinge on assessments at each Monetary Policy Meeting, taking into account the latest data and projections. Key considerations include underlying inflation trends and financial conditions, with a focus on balancing risks to economic activity.
On inflation, Ueda highlighted that the effects of previous cost pass-throughs from higher import prices are waning. However, he noted that “inflationary pressure stemming from wage increases is projected to strengthen” as economic activity and wage growth remain robust.
While underlying inflation currently lags the 2% target, it is expected to rise moderately and align with the price stability target in the second half of the projection period through fiscal 2026.
![Pinterest](https://pinterest.com/pin/create/button/?url=https://www.actionforex.com/live-comments/576195-bojs-ueda-highlights-wages-as-key-inflation-driver-reaffirms-tightening-path/&media=https://www.actionforex.com/wp-content/uploads/2018/03/f-japan5.jpg&description=BoJ Governor Kazuo Ueda reiterated in a speech today that the central bank remains committed to its gradual policy tightening path, conditional on the realization of its economic and price outlook. However, the timing of adjustments will depend on evolving "economic activity and prices" as well as "financial conditions."){kind=link}