Kazuo Ueda states that upside risks to prices will be considered, further strengthening expectations of a Bank of Japan rate hike.

Bank of Japan Governor Kazuo Ueda stated that he would consider upside risks to prices when determining monetary policy, a remark that may further intensify market speculation about a rate hike at the BOJ's policy meeting later this month. Following the G20 meeting of finance ministers and central bank governors, Ueda said the BOJ would engage in thorough discussions on monetary policy at its next meeting, as it does at every meeting. He declined to comment on strong market expectations for a rate hike in September. However, he noted that recent economic data were consistent with the BOJ's previous outlook. This key statement suggests that the BOJ is proceeding with plans for further rate hikes. The central bank had previously indicated that future policy discussions would focus on upside risks to prices. Ueda's comments came as U.S. Treasury Secretary Scott Bessent further called on the BOJ this week to take appropriate policy actions, reinforcing market expectations of an imminent rate hike. Overnight index swaps indicate that the market assigns approximately a 99% probability to a BOJ rate hike in September.