BOJ's Ueda Says Rate Hikes Needed if Middle East Tensions Gradually Ease
Summary
- BOJ Governor Kazuo Ueda said the central bank would continue raising its policy rate if the likelihood of its baseline scenario being realized increases.
- He said the baseline scenario assumes a gradual easing in geopolitical tensions surrounding Iran, while economic growth and underlying inflation around 2%% are maintained.
- The BOJ is scheduled to decide its benchmark rate at its monetary policy meeting on June 15-16, and Ueda's remarks are being viewed as a sign he may be preparing for another rate increase.
Forecast Trend Report by Period
Bank of Japan Governor Kazuo Ueda signaled the possibility of further interest-rate increases.
BlockBeats reported on June 3 that the BOJ would continue raising its policy rate at an appropriate pace if it determines that the likelihood of its baseline scenario materializing has increased, Ueda said. That scenario assumes geopolitical tensions surrounding Iran gradually ease, economic growth remains on a moderate uptrend and underlying inflation stays around 2%.
His remarks are fueling speculation that the BOJ is laying the groundwork for another rate hike. The central bank is scheduled to set its benchmark rate at its monetary policy meeting on June 15-16.
BlockBeats said Ueda's language was less explicit than in the BOJ's previous two rate increases. It added that the governor appeared to be trying to preserve flexibility after Japanese Prime Minister Sanae Takaichi outlined her stance on monetary policy.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul
