Overview
- Governor Kazuo Ueda said the Bank of Japan is targeting moderate inflation supported by rising wages and improving economic activity.
- Ueda said underlying inflation that strips out temporary factors is gradually moving toward the 2% goal, citing resilient consumption and a tight job market.
- Finance Minister Satsuki Katayama told lawmakers inflation has not stably reached 2% and said it is premature for the central bank to raise rates.
- Markets signaled caution, with super-long government bond yields near a one-month high and the yen around 154.8 per dollar and near a record low around 179.5 per euro.
- Prime Minister Sanae Takaichi’s pledged spending package and reflationist appointments have complicated BOJ normalization after two hikes to 0.5% by January and a subsequent pause.