BoJ Governor Ueda says there are possibilities of a rate hike if either upward risks to prices emerge or downside risks to the economy are limited
Importance
Level 1
- By June, probably no big upward pressure appears in consumer price data.
- It is possible to decide before confirming upward price pressure in price data.
- Communicating closely with government on monetary policy.
- When asked if a rate hike is not possible while the Strait of Hormuz is closed, the decision would depend on inflation risks and the economy beyond that.
- Not thinking there is a high likelihood of the current situation resembling the early 1970s.
- If the trend inflation overshoots by 2% by a big margin, then strong tightening could be required.
- In the process of adjusting rates towards neutral, all other conditions being equal.
- Japan's exposure to private credit is not big; it requires caution, given transparency in the sector is low.
- Unless significant downside pressure to the economy, a rate hike is possible.
- Rate hike decision and QT adjustment will be separate.