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BOJ's Ueda Says Japan's Financial Conditions Still Support Economy After Rate Hike to 31-Year High
Summary
- The BOJ said it raised its benchmark interest rate from 1.00% to 1.25%, the highest level in 31 years.
- Ueda said Japan's financial conditions can still support the economy and described the move as aimed at achieving the 2% inflation target.
- Ueda said the BOJ will decide on additional rate hikes by monitoring the economy and prices and reassessing risk factors at each meeting, while the yen still fell into the 157-per-dollar range despite the increase.
Forecast Trend Report by Period
Japan's benchmark interest rate was raised to its highest level in 31 years. Even so, Bank of Japan Governor Kazuo Ueda said the country's financial conditions remain supportive enough to underpin the economy.
FirstSquawk reported on September 18 that Ueda made the remarks at a press conference following the BOJ's monetary policy meeting.
The BOJ decided on September 18 to raise its policy rate by 0.25 percentage point to 1.25% from 1.00%. Ueda said the move was aimed at achieving the central bank's 2% inflation target in a stable manner.
On the prospect of additional rate increases, Ueda said the BOJ will monitor developments in the economy and prices. The terminal rate will become clear only after those trends are confirmed. He added that the BOJ will reassess risk factors at each monetary policy meeting.
Despite the rate increase, the yen weakened into the 157-per-dollar range on September 18. Markets took dissent from two of the BOJ's nine policy board members as a sign that the central bank may moderate the pace of tightening.
Uk Jin
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