Bank of Japan (BOJ) Deputy Governor Shinichi Uchida spoke earlier:

Uchida reaffirmed his hawkish stance, stating that the central bank will continue raising interest rates if its economic forecasts are met. Speaking on the ongoing policy shift, he noted that Japan’s exit from its long-standing ultra-loose monetary policy has only just begun.

Despite recent adjustments, Uchida emphasized that monetary conditions remain very accommodative, pointing out that the BOJ’s reduction in Japanese government bond (JGB) holdings has been limited. He also described the current short-term policy rate of 0.5% as sufficiently easy, reinforcing expectations that the BOJ will proceed cautiously with future rate hikes.

On the economic outlook, Uchida projected that both actual and underlying inflation will likely stabilize around 2% from the second half of 2025 onwards. He also expressed confidence that Japan’s economy will continue to expand above its potential, with steady wage growth supporting private consumption and capital expenditures (CAPEX).

However, he cautioned that global uncertainties remain high, requiring careful monitoring as Japan navigates its policy transition.

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USD/JPY has stacked on the gains since US open: