G7 Central Banks See Need to Weigh Effects of past Rate Hikes -BOJ’s Ueda

Reuters

16:07 JST, May 13, 2023

NIIGATA, Japan (Reuters) – Many central bank governors from the Group of Seven (G7) rich nations appeared to feel the impact of past interest rate hikes has yet to show fully as they look to guide future monetary policy, Bank of Japan Governor Kazuo Ueda said on Saturday.

“Participants seemed to share the understanding that the effect of past interest rate hikes has yet to fully show on their economies and inflation, and could begin to appear more ahead,” Ueda told a news conference after the gathering.

“Many said they wanted to guide monetary policy, taking that point in mind,” he added.

Turning to Japan, Ueda said he told his G7 counterparts the economy was recovering, although consumer inflation, which now stands above 3%, will begin to slow toward the middle of the current fiscal year, which ends in March 2024.

“I told the G7 meeting that Japan is maintaining ultra-loose monetary policy to sustainably and stably achieve the BOJ’s 2% inflation target,” he said.

Ueda and Finance Minister Shunichi Suzuki spoke at the news conference as Japan is the chair of this year’s G7 finance leaders’ gathering in Niigata, which concluded on Saturday.