Japan’s underlying inflation still slightly below target, BOJ governor says
Summary
Underlying inflation in Japan is still slightly below the central bank’s target of 2%, Bank of Japan Gov. Kazuo Ueda said, underlining that it is in no hurry to raise interest rates.
TOKYO—Underlying inflation in Japan is still slightly below the central bank’s target of 2%, Bank of Japan Gov. Kazuo Ueda said, underlining that it is in no hurry to raise interest rates.
“Our goal is to achieve a moderate rise in prices accompanied by solid wage growth," Ueda told a parliamentary committee on Friday. “We believe that it is necessary to support economic activity by maintaining an accommodative monetary environment so that underlying inflation will gradually rise toward 2%."
The remarks echoed prior communications from the central bank, offering little in the way of fresh hints as to when the next interest-rate hike might come.
The BOJ governor reaffirmed that the central bank will keep raising interest rates if the economy and prices develop in line with its outlook.
Data released earlier Friday showed that Japan’s inflationary pressures persist. Overall consumer inflation in Tokyo, considered a leading indicator of nationwide price trends, picked up to 3.4% in January due to higher food prices.
Ueda said that cost-push factors, such as food and energy prices, will ease in the latter half of this year.
The BOJ raised the policy rate by 25 basis points to 0.5% last week to the highest level since October 2008. Judging by the pace of rate hikes carried out since March 2024, when the bank ended its negative interest-rate policy, economists expect the BOJ to gradually tighten policy settings in a roughly six-month cycle.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
