Japan's Bank Governor, Kazuo Ueda, stated at the bank's press conference that the central bank took into account the opinions of market participants regarding the bond purchase plan. Ueda confirmed that the decision to reduce the purchase program is not related to financial considerations, but aims to avoid excessive volatility in the bond market, which is a precautionary measure amid the uncertainty that markets witnessed during April and May.
The Governor of the Bank of Japan explained that it is the markets that should determine long-term interest rates, indicating that the bank has proposed bond purchase plans until the first quarter of 2027 to ensure stability and predictability.
He also emphasized that the Japanese economy is recovering at a moderate pace, despite some weak indicators, while the accommodative monetary policy continues to support economic growth.
Ueda noted that the Bank of Japan is ready to gradually raise interest rates if economic indicators improve and inflation expectations are met. However, he warned that there are many potential risks to prices, both upward and downward, and that the bank will continue to analyze data carefully before making any decisions regarding monetary policy.
The Governor of the Bank of Japan confirmed that global trade uncertainty remains high, even with some tariff reductions. He stressed that these policies may affect corporate decisions, including wage negotiations and winter bonuses, necessitating close monitoring of their effects.
He also pointed out that the analysis of diverse economic data has become more essential than ever amid increasing expectations of bleak economic data being released during the second half of 2025.
