NAGOYA: Bank of Japan Governor UEDA Kazuo on Monday said that monetary policy normalization will be implemented in a way that supports long-term growth of the Japanese economy.

“Going forward, I think that gradually adjusting the degree of accommodation in line with improvement in economic activity and prices will support long-term economic growth and contribute to achieving the price stability target in a sustainable and stable manner,” Ueda said in a speech delivered in the central Japan city of Nagoya.

He indicated that the central bank in its future monetary policy meetings will decide whether to implement additional interest rate hikes.

The BOJ “will make policy decisions based on its latest assessment of the current state of and outlook for economic activity and prices with reference to, for example, the data and information available at the time of each meeting,” he said.

On the possible timing of another interest rate hike to follow one implemented in July, Ueda said that such a move “will continue to depend on developments in economic activity and prices as well as financial conditions going forward.”

He added that the BOJ needs to assess how much the likelihood of its outlook will be affected by risk factors such as US and other overseas economic developments and financial market moves.

Two key factors are “whether overseas economies will follow a moderate growth path” and “whether wages will continue to rise and whether the virtuous cycle between wages and prices will continue to intensify,” he said.

On former US President Donald Trump’s upcoming return to power, Ueda in a question and answer session after the speech said he is paying “very keen attention” to what kind of policies the next US administration under Trump will announce, as the policies will have a huge impact on the global economy.

JIJI Press