Ueda will weigh upside price risks at the Bank of Japan's September meeting
Bank of Japan Governor Kazuo Ueda said the board will set policy with upside price risks in mind at its 17-18 September meeting, remarks market participants read as a signal of a rate increase. Ueda spoke after the G20 gathering in Asheville with Finance Minister Satsuki Katayama and said underlying inflation is approaching 2 per cent. Ueda did not commit to a specific decision. The US Treasury said Scott Bessent told Ueda he strongly supports Japan taking decisive steps against the yen's substantial undervaluation.
Economics & Markets··Midday
Ueda will put upside price risks on the 17-18 September agenda
Kazuo Ueda said the Bank of Japan's board will set policy with upside price risks in mind at its 17-18 September meeting. The Japan Times wrote that market participants read the remarks as a signal of a rate increase. Ueda spoke to reporters after the G20 gathering in Asheville alongside Finance Minister Satsuki Katayama. Kyodo News reported that Ueda said underlying inflation is nearing the 2 per cent price-stability target and that the Policy Board will debate whether to raise interest rates at its next meeting in mid-September. Ueda said the Bank of Japan will evaluate upside risks to inflation in guiding monetary policy and will discuss that at every meeting, including the one on 17 and 18 September.[1], [2]
Ueda does not commit to a decision as the policy rate stands at 1.00 per cent
Ueda said the board debates policy thoroughly at every meeting and did not commit to a specific decision. The Japan Times reported that as underlying inflation approaches 2 per cent the bank has come to believe it needs to pay greater attention than before to upside risks. Kyodo News wrote that many market participants and Bank of Japan watchers expect the policy rate to rise from the current 1.00 per cent. The Bank of Japan held off from lifting the rate further at its previous meeting in July. Ueda cited currency movements, the Middle East conflict and demand for artificial intelligence as key factors affecting inflation and future policy decisions.[1], [2]
Bessent presses for decisive steps against yen undervaluation
Scott Bessent, according to The Japan Times, has also fed expectations of a move through a series of comments hinting at the need for action against yen weakness. Ueda said he had fruitful discussions on a range of topics with the US Treasury secretary on Sunday in Asheville but declined to offer details. The US Treasury said Bessent called for good monetary policy to avoid excess exchange-rate volatility during his weekend meeting with Ueda. According to the US Treasury text carried by Kyodo News, Bessent told Ueda he strongly supports Japan taking decisive market and monetary-policy measures to address the yen's substantial undervaluation. Bessent has repeatedly suggested that the Bank of Japan raise interest rates to tackle the yen's stubborn weakness.[1], [2]
