BANK of Japan Governor Kazuo Ueda underscored Monday that raising interest rates would be essential to prevent sharp inflation and ensure long-term economic growth, in remarks that could fuel market expectations the central bank is close to another rate hike.
The BOJ will continue to raise its policy rate if the economy and prices move in line with expectations, Ueda said in a speech, adding it is also closely monitoring the weakening yen.
The Japanese currency has been under pressure after Donald Trump’s victory in the US presidential election triggered a rally in the dollar. His remarks came amid speculation that the bank may lift borrowing costs as early as December, although Ueda said the BOJ will make policy decisions at each meeting based on its latest assessment and outlook for economic and price activities.
“I think that gradually adjusting the degree of accommodation in line with the improvement in economic activity and prices will support long-term economic growth and contribute to achieving the price stability target in a sustainable and stable manner,” he told business leaders in the central Japan city of Nagoya.
Kyodo
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