Ueda reiterates that BOJ will lift rates if outlook realised

BANK of Japan governor Kazuo Ueda submitted a document to a government panel suggesting that the central bank will continue to raise interest rates if the economy and prices perform as expected by the BOJ.

Ueda submitted the document on Tuesday (Sep 3) to explain the BOJ’s July policy decision to the council on economic and fiscal policy, a government panel chaired by Prime Minister Fumio Kishida.

Following news of Ueda’s unchanged stance, the yen slightly strengthened to around 146.20 to the dollar.

The document suggested Ueda believes the economic environment remains accommodative even after the July hike, as real interest rates continue to be significantly negative. It also said the bank adjusted the level of easing in July as the economy and prices had moved in line with the bank’s outlook, and there were upside risks to prices.

Separately, four private-sector members, including business lobby Keidanren head Masakazu Tokura, submitted a proposal to the panel suggesting there’s a need to manage macroeconomic policy steadily, citing last month’s market turmoil.

The members also said the BOJ and government should collaborate and communicate with the market closely. BLOOMBERG