BOJ head Ueda signals chance of ending negative rates - Yomiuri
Reuters
Published Sep 08, 2023 07:14PM ET
By Leika Kihara
TOKYO (Reuters) -Bank of Japan Governor Kazuo Ueda said the central bank could end its negative interest rate policy when achievement of its 2% inflation target is in sight, the Yomiuri newspaper reported on Saturday, signalling possible interest rate hikes.
The central bank could have enough data by year-end to determine whether it can end negative rates, Ueda told the paper in an interview on Wednesday.
"Once we're convinced Japan will see sustained rises in inflation accompanied by wage growth, there are various options we can take," Ueda was quoted as saying.
"If we judge that Japan can achieve its inflation target even after ending negative rates, we'll do so," he added.
The BOJ currently guides short-term interest rates at -0.1% under its negative rate policy. It also caps the 10-year government bond yield around zero as part of efforts to reflate the economy and sustainably achieve its target.
With inflation exceeding its 2% target for more than a year, markets have been rife with speculation the BOJ will soon start raising interest rates.
But Ueda has stressed the need to maintain ultra-loose policy until the BOJ is convinced inflation will sustainably stay around 2% backed by solid demand and wage growth.
Ueda repeated the stance in the interview, saying the BOJ will "patiently" maintain ultra-loose policy for the time being.
"While Japan is showing budding positive signs, achievement of our target isn't in sight yet," he told the interviewer.
The BOJ will not turn a blind eye to the risk of inflation exceeding expectations, Ueda said, adding wage rises are beginning to push up service prices.
The key is whether wages will keep rising next year, Ueda said. "We can't rule out the possibility we'll get enough information and data by year-end," he was quoted as saying on the timing for ending negative rates.
Under a negative rate policy, banks and other financial institutions are required to pay interest for parking excess cash -- beyond what authorities say they must keep on hand for safety reasons -- with the central bank.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.