《Singapore Daily News Oct 3》Bank of Japan Governor Kazuo Ueda warned today of “heightened global uncertainty” that could impact Japan’s economic outlook, citing weak U.S. labor data, slowing growth in China, and ongoing geopolitical tensions.
Speaking at a financial policy forum, Ueda refrained from offering a clear signal on whether the BOJ would further raise interest rates or pause its tightening cycle—leaving markets guessing.
Will Japan End Its Ultra-Low Rate Era for Good?
Although the BOJ ended its negative interest rate policy earlier this year, inflation has recently fallen below 2%, and wage growth remains sluggish. This complicates the path toward further tightening.
Ueda emphasized that future policy decisions will be data-driven, with special focus on whether domestic companies continue raising wages to support consumption.
“We must assess carefully how external shocks could influence Japan’s wage dynamics,” he said.
Yen Fluctuates as Markets Watch Closely
Following the speech, the Japanese yen briefly strengthened against the U.S. dollar before retreating, reflecting investor caution. Analysts believe that worsening global conditions may force the BOJ to slow or adjust its tightening plans.
A Bloomberg economist noted, “Governor Ueda’s cautious tone reflects the BOJ’s delicate balancing act as it navigates a shifting global environment.”