Bank of Japan Governor Kazuo Ueda hinted on Monday that the central bank may consider raising interest rates at its upcoming policy meeting, marking one of the clearest indications so far that a rate hike could be approaching. Ueda noted that with uncertainties surrounding the U.S. economy and former President Donald Trump’s tariff policies easing, the probability of Japan achieving its economic and inflation targets is steadily increasing.
Speaking to business leaders in Nagoya, Ueda highlighted several positive trends supporting Japan’s economic outlook. He pointed out that labor shortages across industries are becoming more severe, a development that typically drives stronger wage growth. Corporate profits also remain robust, reinforcing the expectation that companies will continue investing and supporting economic momentum. Japan’s top business lobby has additionally urged firms to maintain solid wage increases, backing the central bank’s push for a sustainable cycle of rising wages and prices.
According to Ueda, the BOJ is now closely assessing whether companies will continue their active approach to wage-setting. The central bank has been gathering detailed information through wage-hike surveys conducted by its head office and regional branches. These insights will play a critical role in shaping policy decisions in the coming weeks.
Ueda emphasized that the BOJ will carefully evaluate economic and price trends both domestically and globally, as well as financial market developments, before deciding whether a rate adjustment is justified. The consideration of the “pros and cons” of raising interest rates signals that the central bank is weighing the potential benefits of tightening monetary policy after years of maintaining ultra-low rates.
With inflation gradually stabilizing and wage growth showing signs of persistence, market expectations for a rate hike later this month continue to strengthen. The BOJ’s next policy meeting is now widely anticipated as a pivotal moment for Japan’s monetary strategy.


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