BOJ chief Ueda sees ‘some upside risks’ to inflation

Bank of Japan Governor Kazuo Ueda said underlying inflation is expected to remain around the central bank’s 2 per cent target, while acknowledging some upside risks. Rising energy-related prices are beginning to feed into consumer inflation, which he expects to accelerate further into early next year.

Ueda said wages are growing at a pace consistent with 2 per cent inflation, but the target has not yet become a social norm in Japan. He said the BOJ may use unconventional monetary tools again if a severe economic shock occurs, while weighing their effects on markets. He also pointed to AI’s potential to ease labour shortages and warned that cyber risks at smaller banks and firms could threaten financial stability.