Bank of Japan Governor: Will Continue to Hike Rates, High Oil Prices May Drive Inflation Above 2% Target

BlockBeats News, June 24th - Bank of Japan Governor Kuroda Haruhiko delivered a speech on Tuesday, stating clearly that the central bank will continue to push for interest rate hikes based on economic, price, and financial conditions, and expects to achieve a 2% inflation target from the second half of this fiscal year to the next fiscal year.

Regarding the rate hike path, Kuroda emphasized that the timing and pace of future rate hikes will depend on the likelihood of baseline forecasts and risks, and highlighted that despite the recent rate hike, the Japanese financial environment remains accommodative, supporting economic activities.

On the inflation risk front, Kuroda issued a warning that under the backdrop of high oil prices, potential inflation may exceed the Bank of Japan's 2% target, and high oil prices could also lead to a broader rise in commodity prices. He also pointed out that the timing and pace of rate hikes will be comprehensively assessed considering the impact of the Middle East conflict.

After the announcement, the USD/JPY pair experienced a brief decline of nearly 10 pips, currently trading at 161.66, indicating the market's increased expectations of a Bank of Japan interest rate hike.