BOJ Eyes Further Rate Hikes but Remains Cautious
The Bank of Japan (BoJ) is considering further interest rate hikes but is unlikely to accelerate the process, as underlying inflation has yet to reach the central bank’s 2% target, Deputy Governor Shinichi Uchida said in a speech to business leaders. He cautioned that tightening monetary policy prematurely could dampen economic activity and hinder wage growth. Uchida reiterated that the central bank remains committed to gradual rate increases, provided the economy continues to improve and inflation rises alongside wages. "Adjusting the degree of monetary accommodation gradually, while maintaining accommodative financial conditions, will support long-term economic and price stability," he stated. He expects underlying inflation to reach around 2% between October 2025 and March 2027, driven by wage growth.
Source: Trading Economics