BOJ Governor Ueda’s comments at a press conference By Reuters

(Reuters) – The Bank of Japan kept interest rates steady on Friday and revised its assessment on consumption, signaling confidence that a solid economic recovery will allow the central bank to raise interest rates again in the coming months.

As expected, the BOJ kept short-term interest rates steady at 0.25% at a two-day meeting that ended on Friday.

The following are excerpts from BOJ Governor Kazuo Ueda’s comments at the post-meeting press conference, which was held in Japanese, as translated by Reuters:

INTEREST RATES

“Our decision on monetary policy will depend on economic, price and financial developments at the time. Real interest rates in Japan remain extremely low. If our economic and price forecasts are realized, we will raise interest rates and we will adjust the degree of monetary support accordingly.”

ECONOMIC PERSPECTIVES

“The prospects for economic development abroad are very uncertain. Markets remain volatile. We have to carefully analyze such developments for the time being.”

TARGET PRICE

“We will carefully examine how such risks affect our outlook and the likelihood of achieving our target price.”

EXCHANGE RATE

“In terms of recent exchange rate developments, the risk of an inflationary overshoot due to rising import prices has decreased significantly. As such, we have some time to decide on the policy.” NOMINAL WAGES

“Wages must rise in a way that is consistent with achieving our target prices sustainably. Nominal wages are rising, reflecting the strong outcome of wage negotiations and income growth. Bonuses are growing. We expect wages to continue to rise.”

ON MARKETS STABILIZING “It’s hard to say how long it will take to determine (whether markets have stabilised). We do not have a specific deadline. But one factor we’d like to look at is whether the U.S. economy will hit a soft landing or whether the slowdown could be a little more severe.”

SALARY NEGOTIATIONS

“We are hopeful that next year’s wage negotiations will be strong. But we need to look carefully at how overseas economic developments could affect corporate activity and profits.”

Large INCREASE IN SALARIES

“Wage increases are expanding, but some smaller firms are struggling. We want to carefully examine whether the wage increases will be extended.” JAPAN’S ECONOMY ON THE WAY “In terms of consumption and other data, Japan’s economy is on track and moving in line with our forecasts. We could have even upgraded our view on inflation expectations, based on domestic data. But uncertainty about The U.S. economic outlook has picked up. That offsets some of our optimism about inflationary expectations.” Neutral interest rate

“So far, we have yet to lower the estimated level of Japan’s neutral rate… We need to deepen our analysis, including the impact of our two rate hikes this year.”

LOWER RANGE OF NEUTRAL RATE “We don’t have a specific level in mind when we talk about the lower range of Japan’s neutral rate estimate. We won’t necessarily go slow as we approach that level. But we will be paying particular attention to the impact of our previous rate hikes.” ON INFLATION IN AUGUST “It came in a little stronger than expected. Part of it is due to the weak yen effect. Including other unique factors, some of these factors will dissipate. On the other hand, the prices of services are increasing. with our forecasts as wages rise. We need to consider all this comprehensively. KEY FACTORS THE BOJ WILL CONSIDER IN SETTING POLICY

“One is whether wages will rise consistently, including the impact of expected increases in the minimum wage. Another factor is whether companies will continue to pass on rising (labor) costs to service prices. The outcome of next year’s wage negotiations is also key. as if consumption will remain firm.” POTENTIAL RISK OF BOJ TRAVEL FEES

“In general, each country sets monetary policy to achieve economic and price stability. As such, there could be cases where the monetary policy cycle could differ from one country to another. It is clear that the US has entered a rate cut cycle. leads to a soft landing for the US economy, the negative impact on Japan’s economy will not be large, but if the US economy faces a more severe adjustment, we may need to modify this view.