BOJ Governor Ueda’s Remarks on Economic Recovery

By Leika Kihara

(Reuters) – Bank of Japan Governor Kazuo Ueda stated on Wednesday that the central bank must remain vigilant to the fallout from unstable markets and global economic uncertainties for the time being, focusing on supporting a fragile economic recovery.

Ueda reiterated the BOJ’s view that Japan’s economy will sustain a moderate recovery, helping underlying inflation converge towards the central bank’s 2% target in the coming years.

However, he did not repeat the central bank’s recent pledge to continue raising interest rates if inflation aligns with its forecast, emphasizing instead the various risks involved.

“Uncertainty regarding Japan’s economy and prices remain high,” Ueda noted in a speech at an annual securities industry meeting.

He added, “The outlook for overseas economies, including that of the U.S., remains uncertain, while financial markets are still unstable. For the time being, we will scrutinize such developments with extremely high vigilance.”

Ueda’s comments follow Prime Minister Shigeru Ishiba’s recent urging of the BOJ to maintain a loose monetary policy to help pull Japan’s economy out of stagnation.