The July rate hike is in line with the Bank of Japan’s economic expectations

Bank of Japan (BoJ) Governor Kazuo Ueda responded to a parliamentary question on Friday, saying the Japanese economy was moving in line with the protection of the price target. Ueda also said he will closely monitor market movements with a sense of urgency as uncertainties remain.

Key quotes

Stocks are seen recovering since mid-August.

It adjusts for exaggerated concerns about the US economy.

To monitor markets with great urgency.

He sees financial markets in volatile conditions.

July’s rate hike was in line with the Bank of Japan’s economic expectations.

Emphasizes the need for clear communication of bank policies.

To maintain prudent communication.

It is expected to adjust policy if the economy moves according to plan.

It maintains the position on the adjustment of relaxation measures with increased safety.

To maintain close collaboration with the government.

Believes policy adjustments were appropriate.

The BoJ’s policy path to a neutral interest rate remains highly uncertain.

Japan’s short-term interest rate is still very low, so if the economy is in good shape, the BoJ will raise rates to levels considered neutral for the economy.

There is a lot of uncertainty about where Japan’s monetary policy rate might eventually rise.

Market reaction to BoJ’s Ueda speech

At the time of writing, USD/JPY is trading 0.33% lower on the day to trade at 145.82.