Bank of Japan Governor: Steadily approaching the 2% inflation target, will continue to raise interest rates

```

Bank of Japan Governor Kazuo Ueda stated that as wage growth drives up prices, Japan is steadily approaching its stable 2% inflation target. If the economy performs as expected, the central bank will continue on its rate-hiking path.

In a speech delivered in Tokyo on the 25th, Kazuo Ueda pointed out that Japan's current real interest rate remains at a very low level. He made it clear that if the economic outlook is realized, the Bank of Japan will maintain its pace of rate hikes, continuously adjusting rates based on improvements in the economy and inflation.

Regarding the external environment, Kazuo Ueda believes that risks stemming from the U.S. economy and tariffs have eased, while Japan's economy has shown notable resilience this year. He stressed that adjusting easing policies will help promote Japan's long-term economic growth.

Additionally, Ueda noted that the likelihood of Japan's economy returning to a "zero norm" (i.e., a state where wages and prices are nearly unchanged) has greatly diminished. Core CPI inflation has continued to rise moderately, indicating that structural changes are occurring in the inflation mechanism.

Inflation Target Steadily Approaching; Rate Hikes to Continue if Outlook Realized

Ueda emphasized that the Bank of Japan's policy adjustments will be strictly based on improvements in the economy and inflation. He pointed out that Japan's current real interest rate is at a "fairly low" level, which means the monetary environment remains supportive.

He made it clear that as long as economic trends are in line with the central bank's outlook, the Bank will continue to raise interest rates. In his view, timely adjustment of an excessively accommodative policy stance is not only a tool to address inflation, but also a necessary measure to promote long-term economic growth.

When assessing the inflation trend, Ueda stated that achieving the 2% stable inflation target is “steadily approaching.” He pointed out that, as wages continue to rise, price levels are getting closer to the target range, and core CPI inflation is also maintaining a mild upward trend.

Based on recent data and market information, Ueda believes that the mechanism of moderate increases in both wages and prices is highly likely to be sustained next year and beyond, indicating that Japan is consolidating its virtuous cycle of inflation.

At the macroeconomic level, Ueda assessed that the possibility of Japan's economy returning to the so-called "zero norm" seems to be quite low. Under the previous "zero norm," Japan had long been trapped in a situation where wages and prices were nearly stagnant.

Regarding external risks, Ueda stated that although the global economic environment is complex, risks from the U.S. economy and tariff policy have eased. He pointed out that despite challenges, Japan's economy has still demonstrated sufficient resilience this year.

Risk Warning and DisclaimerThe market has risks; investments need to be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, perspectives, or conclusions in this article suit their particular situation. Investing based on this information is at your own risk. ```