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BoJ Governor Ueda Signals Cautious Approach Amid Inflation Concerns

by Elena

Bank of Japan (BoJ) Governor Kazuo Ueda stated on Thursday that underlying inflation remains slightly below the central bank’s 2% target. His comments suggest that while inflation is expected to pick up gradually, the BoJ remains cautious in its policy adjustments.

Key Takeaways from Ueda’s Remarks:

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Underlying inflation is still below the 2% target but is expected to rise as the economy recovers.

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The BoJ is gradually reducing the size of its balance sheet and will carefully assess the ideal level, considering global examples.

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Japan’s monetary base and balance sheet are currently oversized, prompting a slowdown in bond purchases.

Real wages and consumption are expected to improve as import cost pressures ease and wage growth remains strong.

Market Reaction:

Following Ueda’s comments, the USD/JPY edged up slightly, trading 0.03% higher at 148.20. Investors continue to monitor the BoJ’s policy stance for further signals on potential monetary tightening.

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