Bank of Japan Governor Kazuo Ueda stated on Friday that the central bank’s financial standing will not influence its short-term interest rate decisions, which remain firmly anchored to achieving its inflation target.
“Our short-term policy rate is set solely to meet the inflation goal,” Ueda emphasized, pushing back against speculation that the BoJ’s own balance sheet might sway monetary policy. He acknowledged ongoing corporate behavior marked by assertive price and wage increases, suggesting a dynamic domestic pricing environment.
Ueda also addressed the Bank’s recent downward revision of its inflation forecasts. He attributed the adjustment to a combination of global headwinds, including trade policy uncertainty, a slowdown in cost-driven inflation, and a steep decline in crude oil prices.
Market Reaction:
In currency markets, the Japanese yen strengthened modestly following Ueda’s remarks. As of writing, the USD/JPY pair was trading 0.38% lower on the day at 143.68.
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