The Bank of Japan, through Governor Kazuo Ueda, held a news conference after its policy meeting in Tokyo, discussing the maintenance of ultra-low interest rates. The central bank expressed that risks related to the U.S. economy were showing signs of diminishing, hinting at the possibility of future interest rate increases.
Ueda highlighted that domestic indicators such as wages and prices were aligning with forecasts and emphasized the reduction of downside risks to the U.S. and overseas economies. The central bank projected that inflation would hover around its 2% target in the following years, reiterating its commitment to raising borrowing costs if the economy continued on a path of moderate recovery.
The remarks made by Ueda were perceived as less dovish compared to previous statements, suggesting a shift towards a more optimistic stance regarding the economy. The prospect of a potential rate hike was heightened by the Governor's comments, causing a temporary dip in the dollar-yen exchange rate and triggering speculation of a rate increase in December.