BOJ emphasizes “highly likely” interest rate hike
Bank of Japan (BOJ) Governor Kazuo Ueda said that an interest rate increase is “highly likely” if inflation continues to rise.
If inflation continues to rise, the central bank will “very likely” raise interest rates and begin reducing its massive bond purchases at some point in the future, Bank of Japan (BOJ) Governor Kazuo Ueda said in a speech at a seminar hosted by the Peterson Institute.
Ueda stated that the central bank should maintain its loose monetary policy for now, as inflation remains “slightly below” the 2 percent target.
Ueda also noted that the BOJ, which ended various unconventional monetary expansion measures in March, has brought more flexibility to its policy and may change its short-term interest rate target depending on incoming data.
Finally, Ueda stated that the BOJ will begin to reduce its purchases of Japanese government bonds (JGB), but said that the timing and scope of this reduction have not yet been determined.