BOJ to Carefully Monitor Markets, Overseas Economies: Ueda

Osaka, Sept. 24 (Jiji Press)--Bank of Japan Governor Kazuo Ueda said Tuesday the central bank will carefully monitor financial markets and overseas economies while managing its monetary policy. 
 

The BOJ finds it "necessary to carefully assess factors such as developments in financial and capital markets at home and abroad, as well as overseas economic situations behind these developments," Ueda said in a speech in the western Japan city of Osaka.
 

"We have enough time to do so," he added, signaling again that the bank will not rush its next interest rate hike.
 

He also noted that "the upside risk to inflation reflecting higher import prices has become smaller" with the yen having rebounded from historic lows against the dollar.
 

The BOJ decided at a policy meeting last week to keep its policy interest rate unchanged after raising it to around 0.25 pct at its July meeting.
 

Stocks and the dollar-yen pair showed wild swings in the wake of the July interest rate hike. Worries about a U.S. recession also fueled the market turbulence.
 

Although the U.S. Federal Reserve has pivoted to lower interest rates, "it remains to be seen" whether the U.S. economy can achieve a soft landing, Ueda said.
 

Acknowledging lingering financial market instability, the BOJ chief stressed that the central bank is determined to be "highly vigilant" over market developments and their effects on the bank's outlook on the economy and prices.
 

Meanwhile, Ueda maintained his hawkish stance, saying the policy rate will be raised as long as the economy and prices move in accordance with the bank's projection.
 

On recent dollar-yen moves, he told a press conference after the speech that "short-term unwinding" of the yen carry trade "has come to a pause."
 

Ueda declined to comment on the fate of the joint declaration by the BOJ and the government setting a 2 pct inflation target after a new Japanese prime minister is chosen.
 

"Whoever the next prime minister is, the central bank will communicate closely with the government," he noted.