BOJ governor points to easy money conditions, signals more hikes

2026-06-24

The Bank of Japan on Tuesday released a speech that Governor Kazuo Ueda had been due to deliver at the National Shinkin Bank Convention held the same day. On the current financial environment, it said it views conditions as 'accommodative' and stated that it will continue raising the policy interest rate in line with economic, price and financial conditions.

Reasons for the June meeting decision

The speech was read by Deputy Governor Ryozo Himino, who attended in Ueda's place. The BOJ decided at its June monetary policy meeting to raise the policy interest rate to 1.0%. On the background to its decision to raise rates in June, it said there was a risk that the underlying pace of price increases, excluding temporary factors, could rise above the 2% price stability target.

Rate hikes and the financial system

As for the timing and pace of future rate hikes, the BOJ said it would examine the impact of heightened tensions in the Middle East on the economy and prices while checking the likelihood that its central outlook for the economy and prices will be realized and the risks involved.

On the financial system, it said it sees overall stability as being maintained, while stressing that the impact on the financial system of the Middle East situation, the profitability of artificial intelligence-related investments, and developments in the overseas non-bank sector, among other factors, needs to be carefully monitored through various channels.

Ueda has been hospitalized since June 9 for treatment of a hepatic cyst infection and had missed the June policy meeting, submitting his views in writing. He returned on June 23. Himino's reading of the speech at the National Shinkin Bank Convention had been decided in late May, before Ueda was hospitalized.

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