|

BoJ’s Ueda: Appropriate to raise rates if trend inflation heightens in line with our forecast

Bank of Japan Governor Kazuo Ueda said during his scheduled appearance on Tuesday that it is “appropriate to raise rates if trend inflation heightens in line with our forecast.”

Additional comments

Japan's real interest rate remains deeply negative, stimulating economy and working to push up prices.

If trend inflation moves to around 2%, it is desirable to move our policy rate to near levels seen neutral to economy, prices.

We will raise interest rate if economy, prices move in line with forecasts shown in our quarterly outlook report.

Uncertainty surrounding economy, prices are high.

BoJ must conduct monetary policy in timely, appropriate fashion without having a pre-set schedule, taking into account various uncertainties.

We will watch with strong sense of urgency US and overseas economic outlook, still unstable market developments.

One-sided Yen falls have been reversed since August, rise in import prices moderating.

We can afford to spend time scrutinising market moves and overseas developments behind market developments.

It is also clear persistent, accelerating inflation also have negative impact on economy.

Will release findings of comprehensive review by year-end.

Expect elevated corporate profits to lead to increase in capex.

Consumption likely to increase moderately as household income rises.

Developments regarding the US economy remain uncertain including how past Fed rate hikes could affect labor market.

Prices are rising by around 2% for wide range of goods.

Looking closely at service price moves, it is becoming more clear that impact of wage rises is heightening.

Trend inflation likely to gradually heighten toward 2%.

Change in corporate price, wage-setting behaviour likely to become embedded in society, keep inflation on the rise next fiscal year and beyond.

Must scrutinize whether overseas developments could affect japan's corporate profits, behaviour.

Market reaction

USD/JPY is recapturing 144.00 despite the hawkish comments from the BoJ Chief. The pair is up 0.31% on the day, as of writing.

Japanese Yen PRICE Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Australian Dollar.

 USDEURGBPJPYCADAUDNZDCHF
USD -0.05%-0.12%0.26%-0.21%-0.40%-0.16%-0.03%
EUR0.05% -0.07%0.32%-0.20%-0.36%-0.13%0.01%
GBP0.12%0.07% 0.38%-0.10%-0.28%-0.06%0.10%
JPY-0.26%-0.32%-0.38% -0.45%-0.67%-0.46%-0.29%
CAD0.21%0.20%0.10%0.45% -0.19%0.04%0.19%
AUD0.40%0.36%0.28%0.67%0.19% 0.24%0.40%
NZD0.16%0.13%0.06%0.46%-0.04%-0.24% 0.16%
CHF0.03%-0.01%-0.10%0.29%-0.19%-0.40%-0.16% 

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

More from Dhwani Mehta
Share:

Editor's Picks

EUR/USD clings to gains near 1.1550 ahead of ECB rate decision

EUR/USD trades in positive territory near 1.1550 in Thursday's European trading hours. Rising bets that the European Central Bank will deliver a rate hike after its June policy meeting, keeping the Euro underpinned against the US Dollar. The focus will be on the ECB's updated projections and Lagarde's words.

GBP/USD: Gains remain capped below 1.3400 ahead of US PPI

GBP/USD is consolidating the rebound below 1.3400 in the European session on Thursday. However, the upside potential appears limited amid increased hawkish Fed bets and looming Mideast geopolitical risks, which could limit the US Dollar's pullback ahead of US PPI data.

Gold steadies above YTD low on softer USD; bearish bias remains amid Fed hike bets

Gold fades a modest Asian session bounce to the $4,118 region, though it manages to hold above the lowest level since November 2025. A softer Core US Consumer Price Index eased concerns about a runaway inflation spiral, weighing on the US Dollar and prompting some intraday short-covering around the precious metal.

XRP and XLM: Mild recovery attempts emerge amid mixed market signals

Ripple (XRP) and Stellar (XLM) show mild signs of recovery on Thursday after extending losses earlier this week. XRP is holding above the $1.10 level as bearish momentum begins to fade, while XLM has bounced modestly from a key support zone.

European Central Bank set to hike interest rates for first time in nearly three years

The European Central Bank is set to announce its monetary policy decision at 12:15 GMT following its June meeting. The Frankfurt-based institution is widely expected to raise its key interest rates by 25 basis points, taking the deposit facility rate to 2.25% from 2%.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.