BOJ Governor Says Early Rate Hike Possible if Prices Rise Faster Than Expected

By Megumi Fujikawa

TOKYO--Bank of Japan Gov. Kazuo Ueda said Wednesday that he is open to the idea of early interest-rate increases if inflation rises at a faster pace than the bank's projections.

"If the outlook for prices is revised upward or if upside risks become high, it will be appropriate for the bank to make an earlier adjustment of the policy interest rate," Ueda said at an event held by the Yomiuri International Economic Society.

The Japanese central bank decided in March to end most of its unconventional easing measures, including negative interest rates.

While underlying inflation seems to be on a path toward the bank's 2% target, both upside and downside risks surrounding the bank's price outlook remain high, he said.

The BOJ governor reiterated that the bank would respond with monetary policy if a weak yen significantly affects underlying inflation. He also said foreign-exchange fluctuations are more likely to affect prices now than they did in the past.

Write to Megumi Fujikawa at [e-mail]

(END) Dow Jones Newswires

05-08-24 0600ET