BOJ Governor Ueda signals potential June interest rate hike
Governor Kazuo Ueda signaled the Bank of Japan may raise interest rates to 1% this month. He warned energy shocks could push inflation above bank projections.
Bank of Japan Governor Kazuo Ueda signaled a potential interest rate hike to 1% from 0.75% on June 16 if inflationary risks outweigh economic downsides. This hawkish pivot follows recent yen weakness and rising energy costs that threaten to push underlying inflation above the 2% target. The shift suggests Bank of Japan is prioritizing price stability over growth support as global commodity pressures intensify.
### Inflation Risks Overshadow Economic Softness Ueda noted on Wednesday that secondary spillover effects from higher crude oil prices are increasingly likely to drive underlying inflation above targets. He emphasized that policy decisions must now account for the risk of a sustained price overshoot rather than treating current pressures as temporary.
