Bank of Japan chief vows to keep raising interest rates

By Leika Kihara

Mon, January 5, 2026 astatine 1:07 AM CST 2 min read

TOKYO, Jan 5 (Reuters) - Bank of Japan Governor Kazuo Ueda said connected Monday the cardinal slope volition proceed ​to rise involvement rates if economical and terms developments determination ‌in enactment with its forecasts.

Japan's system sustained a mean betterment past twelvemonth contempt the deed ‌to firm profits from higher U.S. tariffs, Ueda said successful a code delivered to the country's banking assemblage lobby.

"Wages and prices are highly apt to emergence unneurotic moderately," Ueda said, adding that adjusting the grade of ⁠monetary enactment volition assistance the ‌economy execute sustained growth.

The BOJ raised its argumentation complaint to a 30-year precocious of 0.75% from 0.5% past ‍month, taking different landmark measurement successful ending decades of immense monetary enactment and near-zero borrowing costs.

Despite the move, Japan's existent borrowing costs stay profoundly antagonistic with ​consumer ostentation exceeding the BOJ's 2% people for astir 4 years.

Markets ‌are focusing connected the BOJ's quarterly outlook study owed astatine its argumentation gathering connected January 22-23, for clues connected however the committee views the inflationary interaction from caller yen falls.

The yen's weakness has pushed up import costs and broader inflation, prompting immoderate committee members to telephone for ⁠further, dependable complaint hikes.

The dollar roseate 0.2% ​to 157.08 yen connected Monday aft reaching ​157.255 for the archetypal clip since December 22. Market expectations of further BOJ complaint hikes person pushed up yields ‍with those connected the ⁠benchmark 10-year Japanese authorities enslaved (JGB) concisely hitting a 27-year precocious of 2.125% connected Monday.

Speaking earlier the aforesaid banking lobby, Finance Minister ⁠Satsuki Katayama said Japan was astatine a captious signifier of shifting to a growth-driven ‌economy, from 1 mired successful deflation.

(Reporting by Leika Kihara; Editing ‌by Christopher Cushing and Sam Holmes)