Bank of Japan chief again signals chance of rate hike next week
Subscribe to enjoy similar stories. TOKYO—Bank of Japan Gov. Kazuo Ueda repeated his pledge to discuss an interest-rate increase next week, echoing recent comments that have revived market expectations for imminent policy action.
“If improvements in the economy and prices continue this year, we will adjust the degree of monetary easing by raising interest rates," Ueda said at a gathering of regional bank executives on Thursday. That underlines remarks from both him and his deputy earlier this week that a rate hike at the upcoming Jan. 23-24 meeting is firmly on the table.
This week’s comments have lent support to the yen, which touched a one-month high of 155.22 per dollar Thursday. The yield on benchmark 10-year Japanese government bonds hit a more than 13-year high of 1.255% on Wednesday. The Japanese central bank left the policy rate unchanged at its previous meeting in December, as it waits for more evidence of wage growth in Japan and clarity on U.S.
economic policy. The BOJ governor reiterated Thursday that these are the two important points in deciding a rate hike. Ueda said that there seems to be some positive evidence that wages will rise further in Japan, including comments from company executives and information collected by branches of the central bank during talks with companies across the country.
According to the BOJ’s latest regional economic report, more companies understand the need to keep raising employees’ pay, although some small firms are still cautious about doing so. After ending the world’s last negative interest-rate policy framework in March last year, the bank raised the policy rate to 0.25% in July. It has kept the rate at that level since.
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