UEDA: BOJ LIMITED IN USING RATE CUTS TO BOOST GROWTH AMID WEAK YEN
Bank of Japan Governor Kazuo Ueda told parliament on Tuesday that the central bank’s ability to stimulate the economy by lowering interest rates is constrained, especially if there is significant downward pressure on the economy and prices.
These comments follow as the short-term interest rate remains at 0.5%, while core inflation is still below the 2% target.
Ueda reiterated that the Bank of Japan intends to keep real interest rates in negative territory, aiming to guide core inflation toward the 2% mark and ensure it stays there in a stable, sustainable way.
He also stressed that rate hikes will only be considered “if we have sufficient confidence that core inflation is approaching or fluctuating around 2%.”