BOJ’s Ueda Cites Unstable Markets and Global Uncertainty as Reasons for Vigilance, Reports Reuters

By Leika Kihara

Bank of Japan Governor Kazuo Ueda stated on Wednesday that the central bank needs to remain alert to the impacts of unstable markets and global economic uncertainties, emphasizing its commitment to supporting a fragile economic recovery.

Ueda reaffirmed the Bank of Japan’s position that Japan’s economy is expected to experience moderate recovery, which should help bring underlying inflation closer to the central bank’s 2% target in the coming years.

However, he did not reiterate the recent commitment to continue raising interest rates if inflation aligns with expectations, instead highlighting a variety of risks.

"Uncertainty regarding Japan’s economy and prices remains high," Ueda said during a speech at an annual securities industry meeting.

"The outlook for overseas economies, including that of the U.S., remains uncertain, while financial markets are still unstable," he added. "For the time being, we will scrutinize such developments with extremely high vigilance."

Ueda’s comments followed Prime Minister Shigeru Ishiba’s appeal on Tuesday for the Bank of Japan to maintain loose monetary policy as the government aims to revitalize Japan’s economy from stagnation.