(Bloomberg) -- The Bank of Japan is still on a path toward higher interest rates provided inflation and economic data continue in line with its forecasts...
-- The Bank of Japan is still on a path toward higher interest rates provided inflation and economic data continue in line with its forecasts, Governor Kazuo Ueda said in his first public remarks following a global market rout.“If we are able to confirm a rising certainty that the economy and prices will stay in line with forecasts, there’s no change to our stance that we’ll continue to adjust the degree of easing,” Ueda said in response to questions in parliament Friday.
The governor’s remarks point to a relatively robust stance that plays down the impact of the BOJ rate hike in triggering the financial market turmoil at the start of August. The comments suggest that those market tumbles won’t deter authorities from considering more increases in the future as it unwinds years of ultra-easy settings, even if the next move isn’t imminent.
While the BOJ is widely expected to stand pat on policy when the board meets in September, many economists expect the bank to increase borrowing costs again by December, according to a survey conducted earlier this month. The BOJ has come under criticism from observers who said the July 31 hike and Ueda’s post-decision pledge to continue raising rates if conditions allow were key factors that triggered a massive selloff in global financial markets days later.
Ueda’s hearing in parliament comes ahead of a keynote speech by Federal Reserve Chair Jerome Powell later in the day. Expectations of when and by how much the Fed will cut interest rates is a key factor feeding into recent market turbulence.
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