BOJ to Decide Possible Rate Hikes without Preconceptions: Ueda

Jiji Press

15:12 JST, October 3, 2025

OSAKA (Jiji Press) — Bank of Japan Governor Kazuo Ueda said Friday that the central bank will make appropriate decisions on possible additional interest rate hikes without preconceptions.

The bank “will carefully examine the likelihood” of its baseline economic and price forecasts materializing and both upside and downside risks, and “will make monetary policy decisions as appropriate and without any preconceptions,” he said in a speech in the western Japan city of Osaka.

The BOJ last raised its policy rate in January, to around 0.5% from around 0.25%.

The results of the bank’s “tankan” quarterly survey for September, released Wednesday, showed that “business sentiment has improved in some manufacturing industries” reflecting companies’ view that a recent Japan-U.S. tariff agreement has reduced future uncertainty, Ueda said.

Business sentiment “has been at a favorable level on the whole,” he added.

In deciding whether to implement additional rate hikes, Ueda said that the BOJ will monitor global economic trends, including the United States, the impacts of U.S. tariff policy on profits and wages at Japanese companies, and price trends, including food prices.

Referring to the tankan results, Ueda said that profit projections “remain more or less unchanged” from the previous year’s results in the nonmanufacturing sector, where the impacts of the U.S. tariffs are relatively limited, Ueda said.

Overall, corporate profits are “expected to remain at a relatively high level,” he also said.

The mechanism in which wages and prices rise moderately by interacting with each other is expected to “essentially remain in place,” he said.

Meanwhile, Ueda voiced caution, saying that Japanese companies “may place stronger emphasis” on cost reductions and “may weaken their efforts to reflect price increases in wages” if uncertainty remains high regarding overseas economies as well as trade and other policies of foreign nations.

The bank will check whether these risks will materialize in the future by continuing to closely examine firms’ views through its head office and branches.