Bank of Japan Governor Kazuo Ueda said the central bank remains prepared to raise interest rates, even as long-term yields surge and recent data point to softer economic momentum.
BoJ’s Ueda Signals Readiness to Lift Rates as Yields Hit 18-Year High
9 December 2025 - 15:42 CET
Addressing parliament on Tuesday, Ueda described the latest rise in Japanese Government Bond (JGB) yields as “somewhat rapid,” but said the BoJ is gathering detailed information on companies’ wage plans ahead of its next policy meeting, according to reports.
“Taking this and other information into account, we intend to make an appropriate judgment,” he told lawmakers.
Hawkish tone despite mixed indicatorsUeda reinforced that stance in separate comments to the Financial Times, where he said the “real side of the economy is doing OK” and that underlying inflation continues to move toward the BoJ’s 2% goal.
He also noted that US companies have so far absorbed the cost of higher tariffs without passing them through to consumers, helping global inflation pressures ease. Ueda declined to comment directly on Japan’s fiscal course, saying only that the BoJ “tries to stay away from explicit comments on fiscal policy.”
Markets remain under pressureThe remarks follow a sharp climb in the 10-year JGB yield, which touched its highest level in 18 years earlier this week.
The move reflects expectations that the BoJ will continue normalising policy after decades of ultra-easy settings, but market sentiment has been unsettled by a combination of weak domestic data and natural-disaster disruption.
The yen fell after an earthquake in northeastern Japan and a softer-than-expected GDP reading reduced speculation that the BoJ would lift rates as soon as next week.
The GDP release also fuelled broader concerns about Japan’s fiscal outlook following Prime Minister Sanae Takaichi’s large stimulus package announced in November. Early Tuesday, the yen traded around 156 per US dollar.
