BOJ Signals Readiness for Rate Hikes if Inflation Pressures Expand

Governor Kazuo Ueda emphasizes focus on underlying inflation as Japan navigates persistent price increases and historic wage growth.

BOJ Governor Kazuo Ueda reaffirmed the central bank's commitment to raising interest rates if sustained food price increases lead to broader inflation across the economy.
Japan's core inflation reached 3.0% in February, exceeding the BOJ's 2% target for nearly three years, though largely driven by temporary factors like food and energy costs.
The BOJ is closely monitoring underlying inflation, which remains slightly below 2%, and wage growth, currently around 3%, as key indicators for sustainable price stability.
Service-sector inflation hit 3.0% in February, supporting expectations of further rate hikes to address broader inflationary pressures.
The BOJ's next policy meeting on April 30-May 1 will include updated economic projections, with a focus on the impact of rising food prices on underlying inflation.