Bank of Japan (BoJ) Governor Kazuo Ueda holds a press conference on Friday, explaining the central bank’s decision to raise the short-term interest rate from 0.5% to 0.75% after its monetary policy review meeting in December.
Additional quotes
The Japanese economy is recovering moderately, albeit with some weakness.
In Shuntou, companies will continue to raise wages steadily next year.
Low risks are expected regarding the company’s active wage-setting behaviour.
Regarding the US economy, trade policies: uncertainty remains but has eased.
Real interest rates are expected to remain at significantly low levels.
Easy monetary conditions will support the economy.
Interest rate hikes will continue if the economy and prices move in line with expectations, based on improvement in the economy and prices.
Private consumption in the United States remains flat.
Overall downside risks of economic downturn.
The impact of US tariffs does not extend to the Japanese economy overall.
Looking at the Bank of Japan Tankan data, uncertainty about corporate earnings expectations has decreased compared to 3 months ago.
It is very likely that next year’s wage increases will be as strong as last year.
The pace of monetary correction will depend on the economic, price and financial outlook.
There is still a wide range for the neutral rate estimate.
Not only the relationship between short-term and natural interest rates but real rates and lending trends need to be verified.
We will continue to explore where the neutral rate lies while looking at how the economy and prices respond to changes in rates.
There is no particular meaning to a 30-year high in short-term interest rates.
We will look more closely at the impact of the recent interest rate change.
There is still some distance between the lower end of the neutral rate range.
Not seeing a strong tightening impact after interest rate hikes in the past.
We haven’t seen a very significant impact from monetary tightening yet.
Not seeing a strong tightening impact after interest rate hikes in the past.
A decision will be made on raising the interest rate after verifying the impact on the economy, and prices for raising the interest rate to 0.75%.
We have high frequency data on the impact on the financial environment.
Several board members noted that the yen’s recent weakness could impact core inflation.
The concept of the neutral rate is important in the framework of monetary policy.
Plan to revise neutral rate estimates if and when possible.
Don’t expect to be able to provide a much narrower neutral price range right away.
We released neutral rate estimates after central bank moves abroad.
You have good communications with Finance Minister Katayama.
We will continue to work more closely with the government.
Policy focuses on core inflation, when asked about the prospects for raising interest rates until headline inflation subsides.
A rate hike is “actually possible” if wage increases continue to influence prices.
Core inflation will not fall if wages rise.
The Japanese economy is in an inflationary state with headline and core inflation rates above 0%.
Market reaction
USD/JPY pares gains after these comments. The pair was last seen trading 0.26% higher on the day near 156.00.
Japanese yen price today
The table below shows how much the Japanese Yen (JPY) has changed against the major currencies listed today. The Japanese yen was the weakest against the British pound.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.02% | -0.01% | 0.16% | 0.08% | 0.03% | 0.16% | 0.09% | |
| euro | -0.02% | -0.03% | 0.18% | 0.06% | 0.02% | 0.15% | 0.07% | |
| GBP | 0.01% | 0.03% | 0.21% | 0.12% | 0.04% | 0.17% | 0.10% | |
| JPY | -0.16% | -0.18% | -0.21% | -0.09% | -0.14% | -0.02% | -0.09% | |
| Canadian | -0.08% | -0.06% | -0.12% | 0.09% | -0.05% | 0.06% | 0.00% | |
| Australian dollar | -0.03% | -0.02% | -0.04% | 0.14% | 0.05% | 0.13% | 0.06% | |
| New Zealand dollar | -0.16% | -0.15% | -0.17% | 0.02% | -0.06% | -0.13% | -0.07% | |
| Swiss franc | -0.09% | -0.07% | -0.10% | 0.09% | -0.01% | -0.06% | 0.07% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent the Japanese Yen (base)/US Dollar (quote).
