BOJ's Ueda signals chance of rate hike if yen moves affect prices, Asahi reports
© Reuters. FILE PHOTO: Bank of Japan Governor Kazuo Ueda attends a press conference after a policy meeting at BOJ headquarters, in Tokyo, Japan March 19, 2024. REUTERS/Kim Kyung-Hoon/File PhotoTOKYO -Bank of Japan Governor Kazuo Ueda said the central bank could"respond with monetary policy" if yen declines affect the country's inflation and wages in ways that are hard to ignore, the Asahi newspaper reported on Friday.
When asked whether the BOJ could raise interest rates this year, Ueda said it was"dependent on data" and how much progress Japan makes toward sustainably achieving the bank's 2% inflation target, according to Asahi's interview that was conducted on Wednesday. "If exchange-rate developments appear to have an impact on Japan's wage-inflation cycle in a way that's hard to dismiss, that would be a reason to respond with monetary policy," Ueda was quoted as saying by Asahi.
A weak yen has become a source of headache for Japanese policymakers as it inflates the cost of importing raw material and fuel, thereby hurting households and retailers. "There's no need to change our judgment that Japan's economy is recovering moderately as a trend," Ueda was quoted as saying.
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