ASHEVILLE, North Carolina – Bank of Japan chief Kazuo Ueda said Tuesday that underlying inflation in Japan is nearing the central bank’s price stability target of 2 percent, adding its Policy Board will debate whether to raise interest rates at its next meeting.
Ueda said at a press conference after a meeting of the Group of 20 finance chiefs that the BOJ will give consideration to upside risks to inflation in guiding monetary policy.
“We will discuss it at every meeting, including the next one” on Sept. 17 and 18, Ueda said, referring to the possibility of another interest rate increase.
Many market participants and BOJ watchers expect the Japanese central bank to raise its policy rate from the current 1.00 percent.
At its previous meeting in July, the BOJ held off from lifting the rate further, but Ueda cited currency movements, the Middle East conflict and demand for artificial intelligence as key factors affecting inflation and future policy decisions.
The yen’s persistent weakness has added to inflationary pressures in resource-scarce Japan, along with higher energy prices amid the Iran war.
The yield on benchmark Japanese government bonds topped 3.000 percent during Tokyo trading hours on Tuesday, the highest level since 1996.