BOJ's deputy governor Uchida vows to keep raising interest rates
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SHIZUOKA :Bank of Japan Deputy Governor Shinichi Uchida said on Wednesday the central bank will continue to raise interest rates if the economy and prices move in line with the bank's forecasts.
Japan's economy is recovering moderately and consumption will likely be underpinned by solid pay increases expected in this year's wage talks between firms and unions, Uchida said.
With underlying inflation accelerating gradually and wages rising, adjusting the degree of monetary support through interest rate hikes will help achieve stable economic and price in the long run, he said.
"If our economic and price projections outlined in our latest outlook report in January are realised, we will continue to raise the policy rate," Uchida said in a speech to business leaders in Shizuoka.
On the price outlook, Uchida said the BOJ expects the year-on-year increase in consumer inflation to slow towards its 2 per cent target as cost-push pressures wane, while underlying inflation will accelerate towards 2 per cent accompanied by wage gains.
"As a result, both actual inflation and underlying inflation are expected to be at around 2 per cent" sometime during the period from the second half of fiscal 2025 to fiscal 2026, he added.
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