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19 Mar 2025
BoJ's Ueda: Will keep adjusting degree of easing if our economic, price outlook is to be realised
Bank of Japan (BoJ) Governor Kazuo speaks at the post-policy meeting press conference on Wednesday, explaining the Bank’s decision to keep the interest rate steady at 0.50%.
Additional quotes
Japan's economy is recovering moderately, although some weak moves are seen.
Uncertainties surrounding Japan's economy and prices, including global trade policy trends, remain high.
Must pay due attention to FX markets, their impact on Japan's economy, and prices.
FX impact on prices has become larger than in past, as firms are more eager to wage, price hikes.
Will keep adjusting degree of easing if our economic, price outlook is to be realised.
Will guide policy from the standpoint of sustainably, stably achieving price target.
This Shunto result largely in line with our January view.
Must scrutinise wage trends.
Strong momentum of wage hikes spreading to smaller companies.
Need to carefully monitor developments in wages.
developing story ...
Market reaction
USD/JPY remains strongly bid following these comments. The pair was last seen trading 0.27% higher on the day near 149.75.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.