BOJ's Ueda Says Unclear How Long 2% Inflation Will Hold

Bank of Japan Governor Kazuo Ueda said Friday that underlying inflation is around the central bank's 2% target but that it is unclear how long that equilibrium will last, speaking at an International Monetary Fund seminar in Washington.

"I think we are now in an equilibrium state. As for whether we can maintain this equilibrium for a very long time into the future, we do not know," Ueda said, according to remarks carried by Tiger Brokers from the Bloomberg report of the session. CNA, citing Reuters, also reported that Ueda sees "some upside risks" to inflation as energy-related prices begin to feed into consumer prices into early next year.

Why Japan rates matter for crypto

When the BOJ holds policy loose relative to the Federal Reserve, the yen often weakens and global investors borrow yen to buy higher-yielding assets elsewhere, a pattern sometimes called the yen carry trade. Tighter BOJ policy can reverse that flow, pull liquidity from risk markets, and show up in bitcoin and other crypto prices. Ueda said the BOJ watches other central banks "very, very carefully" because their moves affect exchange rates, interest rates and asset prices.

He said wages are growing at a level consistent with 2% inflation, but that 2% has not yet become a social norm in Japan. The bank's job now, he said, is to keep underlying inflation anchored near the target through appropriate policy adjustments. He did not give a fresh timetable for further rate increases.

Bitcoin traded near $75,830 around midnight ET Saturday, per CoinGecko, after U.S. spot bitcoin ETFs posted a $411.9 million net outflow on Nov. 6, Farside Investors data show.

In our opinion: Ueda reached the target and then refused to declare victory. The next BOJ meeting on Dec. 18 is the date that will show whether "unclear how long" turns into another hike or another wait.