Bank of Japan Governor: If the economic outlook is realized, interest rates will be raised
Bank of Japan Governor Kazuo Ueda delivered a speech in Nagoya, stating that if the economic outlook is realized, interest rates will be raised. The market is focused on his assessment of the spring wage negotiations and core inflation. Ueda indicated that even with interest rate hikes, the environment remains accommodative. Following the speech, the US dollar fell against the Japanese yen, the 10-year government bond yield rose to 1.84%, and the Tokyo Stock Exchange index saw an increase. Nomura Securities believes that if Ueda provides a positive assessment of wage negotiations and inflation, the market will interpret it as a signal for interest rate hikes. Investment should be approached with caution; this article does not constitute investment advice
Bank of Japan Governor Kazuo Ueda delivered a speech in Nagoya on December 1, and the market will closely monitor his latest assessment of the "initial momentum of the spring labor negotiations" and "core inflation returning to 2%." If he makes positive comments, it will be seen by the market as a strong signal for a rate hike in December.
Governor Ueda stated that real interest rates are very low. Even if the policy rate is raised, the overall environment will still be accommodative. Following Ueda's remarks, the dollar fell against the yen. The yield on Japan's 10-year government bonds rose by 4 basis points to 1.84%, the highest since June 2008. The Nikkei index's gains expanded to 1%.
Nomura Securities believes two points need to be emphasized. First is Governor Ueda's latest assessment of the spring labor negotiations. If he makes positive comments about spring wage increases, the market is likely to interpret this as a hint of a rate hike in December. Second, if Ueda raises his assessment of core inflation, suggesting that inflation is currently closer to 2%, the market will view this as a hawkish statement.
Risk Warning and Disclaimer
The market carries risks, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk
