Bank of Japan (BoJ) Governor Kazuo Ueda said on Tuesday that the Japanese economy is modestly recovering despite some weakness.
Key quotes
Japanese economy modestly recovering despite some weakness seen.
Corporate profits are improving, with business sentiment solid.
As the slowdown in the overseas economy pressures corporate profits, the pace of economic growth is expected to slow down.
Import prices pushing up inflation are expected to wane.
Uncertainties over overseas trade policies and economic, price situations remain extremely high.
Will continue to raise interest rates if the economy, and prices move in line with forecasts.
Important to make judgment without any preset ideas.
Have said in outlook report that our baseline scenario could change significantly.
Will closely communicate with the government.
Will closely monitor financing situations at companies through BoJ’s networks.
No preset plan for rate hikes, will raise interest rates only if economy, prices turn up again, outlooks likely to be realized.
Vigilantly seeing uncertainties over how tariff rates would affect the economy.
Uncertainties over developments in each country’s tariff policies are extremely high.
Will review bond taper plans at the next policy meeting taking into account opinions of bond market participants.
Aware of market view some investors’ appetite for super-long JGBs have declined.
From long-term perspective, domestic investors remain key buyers of super-long JGBs.
Moves of short, medium-term JGB yields tend to have bigger impact on economy than those of super-long yields.
Volatility in super-long yields could affect short-, medium-term yields so watching market developments and their impact on the economy closely.
Minutes of BoJ’s meeting with bond market players showed there were only few who wanted tweak to existing bond-taper plan.
Minutes of BoJ’s meeting with bond market players showed many thought it was important for the BoJ to continue tapering bond buying while striking balance between flexibility and predictability.
Minutes of BoJ’s meeting with bond market players showed there were various opinions on the desirable pace of BoJ’s bond taper beyond April 2026.
Market reaction
As of writing, the USD/JPY pair was up 0.10% on the day at 142.85.
