BoJ Governor Ueda says expects underlying inflation to accelerate moderately and price trend is to rise gradually
Says:
- Tight labour market, firms' active wage, price-setting behaviour will keep in place a cycle in which wages and prices rise in tandem.
- Temporary freeze on food sales tax may briefly push down inflation, but is likely to have a limited impact on inflation expectations.
- Will guide monetary policy appropriately to stably achieve the inflation target, accompanied by wage gains
- To conduct policy for stable prices with wage growth
Context
Governor Ueda's comments suggest a hawkish tilt, indicating expectations for moderate inflation acceleration alongside a supportive wage growth cycle. This signals a commitment to guiding monetary policy to achieve stable prices, likely reinforcing a gradual tightening path that could influence JPY and fixed-income markets as inflation expectations remain resilient despite potential short-term impacts.
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