BoJ’s Ueda has no preset idea on the timing of next hike

Following BoJ’s decision to maintain its current interest rate, Governor Kazuo Ueda said at the press conference that the central bank has “no preset idea” on the timing of its next rate increase. He added that each policy decision will be based on a thorough assessment of the latest economic data and outlook revisions.

Ueda highlighted promising signs from the latest Tokyo CPI data, observing that the “pass-through of rising wages on services prices is broadening.” He added that BoJ will closely monitor whether this trend spreads across the nation.

Domestically, wages and prices are generally moving in line with BoJ forecasts, and recent changes in companies’ wage- and price-setting behaviors over the past two years point to a potential structural shift. However, Ueda acknowledged that it’s uncertain whether this shift will gain momentum or fade over time.

Ueda also pointed out the importance of currency volatility and commodity prices, as these factors significantly impact domestic import prices.

While recent political developments in Japan are unlikely to alter BoJ’s price forecasts, Ueda noted that substantial policy changes could prompt revisions as needed.