Bank of Japan Signals Potential December Rate Hike as Economic Indicators Align

Governor Kazuo Ueda emphasizes wage and inflation data while expressing caution over U.S. policy uncertainties.

Bank of Japan Governor Kazuo Ueda stated that the timing for an interest rate hike is approaching, with economic data aligning with the central bank's forecasts.
The BOJ is closely monitoring wage trends, particularly the upcoming fiscal 2025 spring wage negotiations, as a key factor in its decision-making process.
Inflation in Japan's capital accelerated in November, staying above the BOJ's 2% target, fueling expectations for a potential rate hike.
Ueda highlighted concerns about the depreciating yen and its potential impact on the BOJ’s economic projections if inflation remains elevated.
Uncertainty surrounding U.S. economic policy, including President-elect Donald Trump's proposed tariffs, adds complexity to the BOJ's considerations ahead of its December 18-19 policy meeting.