BoJ to assess conditions for December rate hike

The Bank of Japan is weighing the “pros and cons” of raising interest rates at its December 18–19 meeting, Governor Kazuo Ueda said in a speech Monday.

With U.S. tariff risks fading, he noted the central bank’s economic and price projections are increasingly likely to be met, suggesting conditions for a hike are forming.

Ueda stressed the importance of wage-setting, saying the BoJ must assess whether firms’ active behavior will persist.

Labour shortages, strong corporate profits, and calls to anchor wage gains add support, while policymakers are gathering wage data via firm surveys. He added that policymakers will examine domestic and global developments, market moves, and consider the merits of a hike.

A weak yen could also lift inflation through higher import costs, Ueda noted.

After ending a decade-long stimulus last year and raising rates to 0.5% in January, the BoJ has held steady, but persistently high inflation is bolstering expectations for another move.