BoJ’s Ueda: Economy recovering gradually despite some signs of weakness

In a parliamentary address today, BoJ Governor Kazuo Ueda noted that Japan’s economy is “still recovering gradually”, despite acknowledging some recent “signs of weakness”.

Ueda highlighted a concerning trend of weakening consumption in food and daily necessities amid rising prices. However, he also pointed out a silver lining with moderate improvements in household spending, fueled by expectations of wage increases.

The anticipation around a rate hike by BoJ has garnered significant attention recently, with Ueda reiterating the bank’s focus on the emergence of a “positive wage-inflation cycle.” This perspective is crucial for determining the viability of reaching BoJ’s inflation targets sustainably and stably.

“Various data have come out since January and we’ll likely have additional data come out this week. We will look comprehensively at such data, and make an appropriate monetary policy decision,” he said.