The president of BoJ (Bank of Japan)Kazuo Ueda, stated that the central bank still does not know what interest level would be ideal for the economy, indicating that it is not clear when the monetary tightening cycle will end.
In a hearing in Parliament this Thursday (4), Ueda said that the BoJ is working to define the “neutral rate” range – the level compatible with economic stability. “The final decision on how high to raise the nominal rate depends on this factor, so there is some uncertainty,” he said.
According to him, the BoJ will share its conclusions when there is a definition.
Statements by Ueda at the beginning of the week reinforced expectations that the BoJ will resume tightening at its meeting on December 18 and 19, which pushed up Japanese bond yields and strengthened the yen.
The yield on the 10-year Japanese government bond (JGB) hit 1.920% today, the highest since July 2007. The yen was trading around 155.30 per dollar, recovering after touching 157.90 recently.
In a speech on Monday (1), Ueda promised to discuss the pros and cons of raising the basic rate, currently at 0.5%, and make a decision at this month’s meeting.
Today, he reiterated that monetary conditions are still accommodative, suggesting that policy will continue to support the economy even if the BoJ opts for an interest rate hike.
Content translated with the help of Artificial Intelligence, reviewed and edited by the editorial staff of Broadcast, Grupo Estado’s real-time news system.
