BoJ's Ueda: Judged appropriate to adjust degree of easing


Speaking at the post-policy meeting press conference on Wednesday, Bank of Japan (BoJ) Governor Kazuo Ueda said that the Bank “judged appropriate to adjust the degree of easing from the perspective of sustainable, stable achievement of 2% inflation.”

The BoJ raised the benchmark interest rate by 15 bps to 0.15%-0.25%  after holding rates for two consecutive meetings.  

Additional quotes

Japan's economy is recovering moderately.

Must pay due attention to financial, FX markets, impact on Japan's economy, prices.

Upside risks to prices require attention.

Long-term yields should be formed in financial markets in principle.

Appropriate to taper JGB buying in predictable manner while ensuring market stability by allowing flexibility.

Will respond nimbly if there's sharp rise in long-term yields by increasing purchases, conducting fixed-rate operations.

Will keep raising rates, adjust degree of easing if current economic, price outlook will be realized.

Views received at bond market group meeting reflected in our tapering plans.

Private consumption remains solid despite inflation impacts seen.

Confirmed that wage hikes becoming widespread.

Rising wages, income will continue to support private consumption.

Some market participants at July meeting expressed concerns about outlook.

Momentum for wage growth is spreading at small and medium companies.

Import prices starting to pick up gain, attention needs to be paid.

Prices are getting to be more affected by foreign exchange swings compared to the past.

Although not especially strong, private consumption is deemed solid.

Judged spring pay negotiations' result firmly reflected, looking at april-may wages data.

Don't believe this rate hike will have significant negative impact on economy.

Will closely share basic view on economy, prices with govt.

Don't have 0.5% policy rate in mind.

In our estimate, size of BoJ balance sheet will be 7-8% smaller in about two years but still bigger than desirable levels in long-term.

Will check impact of rate hikes up until this point when considering additional rate hike.

Don't believe economy, prices will slow down due to additional rate hike.

There are positive aspects of raising rates now to avoid sudden hikes in future.

No change to our view that neutral rate of interest has large uncertainties.

But as of now Japan's rates are far below the uncertain levels of neutral rate.

We have just shifted our stance to use short-term rates as main policy tool as we no longer need massive easing.

Weak Yen didn't have much impact on our price outlook.

But we made policy response this time, consering upward risks to prices are considerably large.

Hard to comment on FX impact of stronger Yen on economy, prices.

Whether strong Yen impact is same or smaller than that of weak Yen is 'interesting matter'.

Weak Yen did not move our central price outlook but we recognised it as important risk that could move the outlook.

The latest interest rate hike could move up short-term prime rates and subsequently housing loan interest rates too.

Wage growth is expected to precede interest rate payments for housing loans so burden on homeowners will lessen.

Interest rate hikes have negative impact on households with debt while having positive impact on those with deposits.

Hard to tell when the next rate hike may be.

Market reaction

USD/JPY is little changed following these comments. The pair was last seen trading flat on the day at 152.75.

Bank of Japan FAQs

The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

The Bank of Japan has embarked in an ultra-loose monetary policy since 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds.

The Bank’s massive stimulus has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy of holding down rates has led to a widening differential with other currencies, dragging down the value of the Yen.

A weaker Yen and the spike in global energy prices have led to an increase in Japanese inflation, which has exceeded the BoJ’s 2% target. With wage inflation becoming a cause of concern, the BoJ looks to move away from ultra loose policy, while trying to avoid slowing the activity too much.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Trading Pro
Read review
Pepperstone
Read review
Trading Pro
Read review
Pepperstone
Read review

Recommended content


Recommended content

Editors’ Picks

EUR/USD retreats from fresh multi-year highs, holds above 1.1000

EUR/USD retreats from fresh multi-year highs, holds above 1.1000

EUR/USD neared 1.1150 in the European session on Thursday, shedding roughly 100 pips afterwards. The Euro holds on to solid gains amid broad US Dollar weakness, after US President Trump unveiled aggressive tariffs on the "Liberation Day." Markets await mid-tier US data releases.

EUR/USD News
GBP/USD surges to multi-month tops near 1.3200 ahead of US data

GBP/USD surges to multi-month tops near 1.3200 ahead of US data

GBP/USD paused its rally after briefly surpassing the 1.3200 mark, yet holds on to most of its intraday gains. The US Dollar plunged to a fresh YTD low amid worries about a tariff-driven US economic slowdown, lifting Fed rate cut bets and weighing on the Greenback. The focus now remains on the US data for further impetus. 

GBP/USD News
Gold retreats below $3,100 from all-time peak

Gold retreats below $3,100 from all-time peak

Gold price extends its steady intraday pullback from the all-time peak touched this Thursday, and pierces the $3,100 mark in the European session. Bullish traders opt to take some profits off the table and lighten their bets around the commodity amid slightly overbought conditions.

Gold News
SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX

SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX

Solana (SOL) gains nearly 2% in the last 24 hours and trades at 118.28 at the time of writing on Thursday. A Decentralized Exchange (DEX) and a meme coin launchpad built on the Solana blockchain have waged a war for users and compete for the trade volume on the chain. 

Read more
Trump’s “Liberation Day” tariffs on the way

Trump’s “Liberation Day” tariffs on the way

United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs. 

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025