[PRESS CONFERENCE] BoJ Governor Ueda says Japan's economy is recovering moderately although some weak moves are seen

Policy

• Will continue to adjust the degree of easing of the economic/price outlook is to be realised.
• Will guide policy from the standpoint of sustainably and stably attaining the price target.
• Timing and scope of raising rates further is dependent on the economy, financial and price conditions.
• No preset idea on future adjustments. 
• Will carefully monitor the market impact from the rate hike. Need to think about its impact in the context of rising inflation and wages.
• No preconceived ideas around the scope/timing of the next rate rise.
• No new information on where the neutral rate should be.
• Have come closer to the neutral rate with today's decision. However, still a long way to go.
• Gradually guiding policy out of ultra-loose conditions, without high inflation, is deal.
• Next rate hike will depend less on economic growth but more on price moves. Would rather proceed with caution, do not want to wait until a very large negative impact emerges from tightening.

Prices/Wages

• Board has judged that spring wage talks will result in strong hikes again this year. Growing number of firms expressed intentions to continue increasing wages steadily.
• Import prices have been on an upward trend vs the prior outlook in October, amid weaker JPY.
• Expect CPI to settle after mid-2025.
• If the wage setting norm continues to change, the likelihood of achieving the (inflation) target rises significantly.
• Growing number of firms factoring in plans to raise wages, in view of the medium-term projection.
• View prices as being "on track" with forecasts, as higher wages are reflected on prices.
• Possible the spring wage talks in FY26 will see upward pressure, if inflation expectations rise in FY25.
• Always mindful of real wages falling and consumption languishing.
• Real wages to go positive, if certain wage growth continues.
• Wage growth and inflation expectations are among the relatively tangible indicators of underlying inflation.

Inflation

• Price trend is increasing towards the 2% inflation target.
• Likelihood for realising the outlook is increasing. The virtuous cycle will strengthen gradually.
• On 2025 forecasts, upward revisions primarily at the middle of the calendar year.
• Appropriate response will be to gradually ascertain how underlying inflation rises in the future.
• Upward revisions to FY24 & FY25 core CPI forecasts are primarily due to cost-push factors.

FX

• FX impact on prices has become larger than previously, as firms are more eager to give wage and price hikes.

Global Markets

• Financial markets have been stable as a whole.
• Markets have been calm post-Trump
• Must be attentive to markets and impact on the economy/prices.

Growth

• Labour shortage resulted in downgrades to the potential growth rate. This may impact the neutral rate, though likely very small.

Tariffs/Trump

• At this point, US tariff policies are uncertain. Cannot comment on the impact.
• Will provide a view once the details become clear.
• Will watch for the impact on the global economy.
• Thus far, Trump's moves are within expectations - no big market rout seen.

ETFs

• Still need time to consider what to do with the BoJ's ETF holdings.