BOJ’s Ueda Vows to Increase Bond Purchases if Necessary

Tokyo, Dec. 9 (Jiji Press)–The Bank of Japan will increase its purchases of government bonds if long-term interest rates rise exceptionally rapidly, BOJ Governor Kazuo Ueda said Tuesday. Long-term interest rates have been rising at a somewhat rapid pace recently, Ueda said at a meeting of the Budget Committee of the House of Representatives, the lower chamber of parliament. The central bank “will increase its purchases of government bonds and take other measures flexibly in an exceptional situation in which long-term interest rates rise rapidly in a way different from normal market movements,” he said. The 10-year government bond yield, regarded as the country’s benchmark long-term interest rate, has been on the rise, coming close to 2 pct. The rise comes amid growing concerns that Prime Minister Sanae Takaichi’s proactive fiscal policy will further undermine state finances and speculation that the BOJ will continue to raise interest rates after hiking them next week. Ueda reiterated that the BOJ “will continue to raise the policy interest rate and adjust the degree of monetary accommodation” if the outlook for economic activity and prices outlined so far is realized. The likelihood of the outlook for economic activity and prices being realized is gradually increasing, given the recent decline in uncertainties over U.S. tariff policy, he said. Takaichi said that she hopes that the BOJ will steer monetary policy appropriately to achieve 2 pct inflation. The specific policy approach “should be left to the BOJ,” she said. END [Copyright The Jiji Press, Ltd.]