Japan Interest Rate

Bank of Japan Governor Kazuo Ueda told parliament on Thursday that the central bank aims for moderate inflation alongside wage growth and economic improvement, aligning with Prime Minister Sanae Takaichi's focus on reflating growth. While demand for food and other non-durable goods is weakening, Ueda noted that domestic consumption remains resilient thanks to rising household incomes. A tight labor market is supporting higher pay, sustaining a moderate cycle of wage and price increases. “When we look at underlying inflation that strips away temporary factors, it is gradually accelerating toward our 2% target,” he said, indicating progress toward conditions that could justify a future interest rate hike as the gradual economic recovery lifts prices across goods and services.