MNI BRIEF: BOJ Ueda Doesn’t See 10-Yr Rate Rising To 1%

Bank of Japan Governor Kazuo Ueda said on Friday he does not expect the 10-year interest rate to rise to 1%, despite the Bank board today deciding to tolerate the rate to rise to that level if caused by stronger economic and price views.

“When I saw recent movements of the 10-year rate, the rate stayed below 0.50%," Ueda told reporters. "But looking ahead, the 10-year interest rate will be influenced by future economic and price developments." He indicated that the BOJ preemptively took action to cope with future upside and downside risks caused by economic and price developments. (See MNI BRIEF: BOJ On Hold; Makes 10-Yr Rate Moves More Flexible)

Ueda said that sustainable and stable achievement of the price stability target of 2%, accompanied by wage increases, has not yet come in sight and the BOJ is still away off from its achievement of the 2% price target. The Bank must patiently continue with easy policy, Ueda said.