Bank of Japan Deputy Gov. Shinichi Uchida signaled that the benchmark interest rate remains on a gradual upward path, in remarks that may quell speculation of an early move.
"The Bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation” if the economic outlook is realized, Uchida said Wednesday in a speech to business leaders in the city of Shizuoka. "In this regard, the key point of the outlook is that the bank expects the 2% price stability target to be achieved.”
Uchida said officials will have to monitor the economy’s reaction to every rate hike — after three increases in the last 12 months — as it is hard to gauge exactly where the neutral rate that is neither restrictive nor stimulative resides. That comment suggests it is unlikely the bank would raise rates at back-to-back meetings, including in March after it hiked in January. He indicated that the benchmark rate could rise to at least 1% by the end of fiscal 2026 by citing a range of estimates.
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