BOJ's Ueda sticks to economic recovery view, keeps alive rate hike chance

FILE PHOTO: Bank of Japan Governor Kazuo Ueda attends a press conference after a policy meeting at BOJ headquarters, in Tokyo, Japan March 19, 2024. REUTERS/Kim Kyung-Hoon/File PhotoSTRESA, Italy : Bank of Japan Governor Kazuo Ueda said on Thursday the economy was on track for a moderate recovery, suggesting a slump in first-quarter gross domestic product alone would not keep the central bank from raising interest rates in coming months.

Japan's economy shrank an annualised 2.0 per cent in the first quarter as output disruptions at some automakers hurt production and exports. Consumption also took a hit from rising living costs, blamed in part on a weak yen that inflated import costs. Inflationary pressure from rising raw material costs is also likely to dissipate which, coupled with rising nominal wages, will underpin household income and consumption, he added.

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Analysis:The yen has a yield problem the BOJ can't easily fixTOKYO : As the yen plumbs three-decade lows and pressure grows on Japan to intervene or make monetary policy changes, traders figure there is not much Tokyo can do to reverse the currency's slide while interest rates and momentum are heavily skewed against it.
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »