BOJ Governor Ueda says underlying inflation quite close to 2% target, warns on bond yields

What happened

Bank of Japan Governor Kazuo Ueda told parliament on Monday that underlying inflation is "quite close" to the BOJ's 2% target, and said it is becoming more important to anchor inflation around that level. Ueda cited a tight job market, a moderate economic recovery, and "very strong" global AI demand boosting capex and exports as sources of price pressure, alongside rising raw-material costs from the Middle East conflict. He warned that failing to adjust the policy rate at an appropriate pace could push long-term bond yields higher by stoking concern over an inflation overshoot.

Who’s affected

• Japanese equities and yen-sensitive names: a faster BOJ path typically strengthens the yen and pressures Japanese exporters
• Global rate-sensitive growth/tech stocks: another major central bank turning hawkish adds to upward pressure on long-term yields
• U.S. Treasuries: Ueda's warning that delayed hikes could push long-term yields higher reinforces the global bond selloff backdrop

Sources

reuters.comfxstreet.com