The Bank of Japan (BoJ) Governor Kazuo Ueda said on Monday that the Japanese economy is recovering moderately despite weak signs.
Key quotes
Japan’s economy recovering moderately despite weak signs.
Will increase interest rates upon realization of strong economic outlook.
To increasingly raise policy rate to adjust monetary support in line with economic and price forecasts.
Monitoring effects of various risks on economic outlook.
Sees moderate increase in private consumption trend.
Maintains stance to support economic activity.
Sees rise in income in both corporate and household sectors.
Gradually adjusting monetary support will help achieve price target through sustained economic growth.
Must monitor various risks, including US economy.
Increase in spending is gradually intensifying virtuous cycle.
To monitor wage negotiations in the future.
Sees executives of large firms announce commitment to sustained wage growth.
Firms should pass on higher labor costs through price hikes.
Gradual adjustment to easing to aid inflation goal.
Long-term inflation expectations embedded among households and firms.
Supports firm monetary policy to boost the economy.
Projects strengthening inflationary pressure from wage increases.
High uncertainty over future growth pace in China.Expects underlying inflation to continue rising moderately.
To focus on outlook of wage negotiations and how increased wages will affect inflation.
It is crucial to achieve a sustained increase in real wages, such as by raising productivity.
Sees increasing likelihood of soft landing.
Need to monitor US economy carefully.
Cautions volatile markets based on economic data and geopolitical risks.
Underlying inflation expected to moderately increase.
High uncertainty over China's growth rate.
Japan's economy and prices remain vulnerable to volatile market moves.Greatly interested in how US policy under President-elect Trump will unfold given the outlook of the US economy will have a big impact on the global economy.
It will take quite a long time before we get clarity on how US economic policy under Trump will unfold.
Market reaction to the BoJ’s Ueda speech
At the time of writing, USD/JPY is trading 0.46% higher on the day to trade at 155.01.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD struggles around 1.2600 after BoE rate decision
GBP/USD retreated from its daily peak and battles around 1.2600 following the Bank of England monetary policy decision. The BoE kept the benchmark interest rate unchanged at 4.75% as expected, but the accompanying statement leaned to dovish. Three out of nine MPC members opted for a cut.
EUR/USD retakes 1.0400 amid the post-Fed recovery
EUR/USD is recovering ground to near 1.0400 in the European session on Thursday. The pair corrects higher, reversing the hawkish Fed rate cut-led losses. Meanwhile, the US Dollar takes a breather ahead of US data releases.
Gold price recovers from one-month low, retains modest gains above $2,600
Gold price attracts some haven flows in the wake of the post-FOMC sell-off in the equity markets. The Fed’s hawkish outlook lifts US bond yields and provides near-term support to XAU/USD. Market players await US GDP and employment-related data.
Aave Price Forecast: Poised for double-digit correction as holders book profit
Aave (AAVE) price hovers around $343 on Thursday after correcting more than 6% this week. The recent downturn has led to $5.13 million in total liquidations, 84% of which were from long positions.
Fed-ECB: 2025, the great decoupling?
The year 2024 was marked by further progress in disinflation in both the United States and the Eurozone, sufficient to pave the way for rate cuts. The Fed and the ECB did not quite follow the same timetable and tempo, but by the end of the year, the cumulative size of their rate cuts is the same: 100 basis points.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.