Overview
- Core inflation in Tokyo slowed to 2.3% in December from 2.8% in November, remaining above the 2% target and reinforcing the case for continued policy normalization.
- The Bank of Japan lifted its policy rate to 0.75% last week, the highest in roughly three decades, marking another step away from ultra‑easy settings.
- Ueda said real interest rates remain very low and signaled the BOJ will raise borrowing costs further if its baseline outlook for growth and prices holds.
- He pointed to structural labor shortages tied to a declining working‑age population and broader corporate price pass‑through as forces supporting sustained wage gains.
- Analysts expect no change at the Jan. 22–23 meeting, when updated quarterly forecasts may shed light on how yen weakness is influencing the inflation outlook.