Markets are focusing on any hints from the governors. Bank of JapanKazuo Ueda, on the timing and pace of future price increases Interest During his press conference after the meeting.
As widely expected, the Bank of Japan kept short-term interest rates steady at 0.25 percent at a two-day meeting that ended on Friday.
The Bank of Japan said in a statement announcing the decision that private consumption has seen a moderate upward trend despite the impact of rising prices (inflation) and other factors.
This assessment was more optimistic than the previous assessment, which described consumption as resilient.
The Bank of Japan ended negative interest rates in March and raised short-term rates to 0.25 percent in July, a historic shift away from a decade-long ultra-loose stimulus program aimed at stoking inflation and ending deflation in the economy.
Ueda, the governor, confirmed that Bank of JapanThe Bank of Japan is prepared to raise interest rates further if inflation remains on track to reach its 2 percent target sustainably, as the board currently expects.
If he repeats such hawkish comments at his news conference, he will be at odds with several other central banks that have shifted into a rate-cutting cycle, including the US Federal Reserve, which delivered a big cut in borrowing costs on Wednesday.
A majority of economists polled by Reuters expect the Bank of Japan to raise interest rates again this year, with most betting on a December increase. None of the respondents expected a rate hike this month.
Inflation accelerates for the fourth month in a row
Friday’s data also showed that Inflation Core consumer price inflation rose 2.8 percent in August, accelerating for a fourth straight month, keeping expectations alive for more interest rate hikes.
Japan’s economy grew at an annualized 2.9 percent in the April-June period and real wages rose for two straight months in July, easing concerns that rising living costs could weigh on consumption.
But weak demand in Chinaslowing growth in the United States, and a recovery Yen The latter casts a shadow over the outlook for the heavily export-dependent country.
Financial market volatility remains a major concern for Bank of Japan policymakers after a July interest rate hike and hawkish comments from Ueda sent the yen higher and stocks sharply lower.
Several Bank of Japan policymakers have called for careful scrutiny of market movements when setting policy. But they have also reiterated the bank’s readiness to continue raising interest rates, with one hawkish board member saying short-term rates should eventually rise to around 1 percent.
