Bank of Japan Governor Kazuo Ueda: Continued rate hikes are necessary to curb inflation

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Golden Finance reports that on June 3, in his final routine speech held ahead of an upcoming highly anticipated policy meeting, Japan’s central bank governor Kazuo Ueda said the Bank of Japan needs to keep raising interest rates in line with economic conditions and inflation. Ueda said, “For example, if the central bank judges that the likelihood of achieving the baseline scenario is increasing—meaning that tensions in the Middle East will gradually ease, and against the backdrop of moderate economic growth, the core inflation rate will gradually recover to around 2%—then I believe the central bank will continue to raise its policy interest rate at an appropriate pace.” His remarks suggest that a rate hike this month is fairly likely, but his wording is not as clear as it was during the previous two rate hikes. This indicates that Ueda hopes to maintain a degree of flexibility as the situation in the Middle East becomes increasingly complicated and uncertainty grows, and amid Prime Minister Shinzō Takaiichi’s stance on monetary policy.
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