Ueda Kazuo reiterated concerns about Trump and the "Spring Struggle" risks, but did not mention next month's interest rate hike

Kazuo Ueda delivered a speech, reiterating concerns about next year's "Shunto" and the impact of Trump. On Wednesday, Bank of Japan Governor Kazuo Ueda spoke at a business meeting in Tokyo, stating that Japan's inflation will be closer to the bank's 2% target next year, laying the groundwork for further interest rate hikes. Kazuo Ueda mentioned that Japan's efforts regarding inflation have shown results, if the economy continues to improve, the bank will raise interest rates, as maintaining excessive monetary support for a long time may increase inflation risks. "As labor shortages drive up wages and consumption shows signs of improvement, Japan has made progress in achieving its long-term inflation target after years of aggressive monetary stimulus." He also warned that it is necessary to carefully examine the consequences of the "high uncertainty" surrounding the overseas economy, particularly the economic policies of President-elect Trump after taking office, stating that more information about Trump's policy positions is needed before considering another rate hike. Kazuo Ueda also stated that the outlook for wage negotiations in the spring of next year is also key to assessing the monetary policy path: "The timing and pace of adjustments to the degree of monetary easing will depend on the developments in economic activity and prices, as well as future financial conditions." When discussing the outlook for 2025, Kazuo Ueda stated: "Our forecast is that the virtuous cycle will further intensify, and Japan's economy will be closer to a sustainable and stable 2% inflation, while wages will also rise." Although Kazuo Ueda's remarks indicate the Bank of Japan's determination to continue raising interest rates, he did not disclose a specific timeline. Currently, most analysts expect the bank to raise the benchmark interest rate from 0.25% to 0.5% in January or March. The Bank of Japan kept its monetary policy unchanged at this month's meeting, and Kazuo Ueda stated at a news conference that the Japanese economy is recovering moderately, prices are expected to gradually rise, but there remains a high level of uncertainty regarding the economy and inflation. The bank will hold its next monetary policy meeting on January 23-24