BOJ Governor Ueda’s comments at news conference

On October 30, the Bank of Japan maintained its interest rates unchanged, but declared success in its 14-year effort to reach its price target, while highlighting the need for vigilance against inflation risks. With underlying inflation nearing the central bank's 2% target, BOJ Governor Kazuo Ueda emphasized that the bank's policy has entered a more hawkish phase, open to raising rates periodically.

During his post-meeting news conference, Ueda stated that the bank is scrutinizing economic and price risks, as well as financial conditions. Despite financial conditions remaining accommodative, Ueda stressed that there are various upside risks, and the bank must remain vigilant to the potential for inflation to overshoot its target.

Ueda's focus is on understanding the mechanisms behind price movements and ensuring that medium- and long-term inflation expectations are anchored around the bank's 2% target. He reiterated that achieving the price target is a sustainable and stable goal, but the bank still has not reached this milestone. Ueda emphasized that it is crucial to anchor underlying inflation around the target, which does not imply waiting passively.

Instead, the bank will adjust monetary policy as necessary to ensure underlying inflation remains anchored around 2%.