MNI BRIEF: CPI Revision Not A Policy Signal - BOJ's Ueda

Bank of Japan Governor Kazuo Ueda said Thursday that the upward revision to the Bank’s inflation outlook for this fiscal year does not signal a shift in the direction of monetary policy, following the Board's decision to hold the policy rate at 0.5%.

“We revised up the inflation view (to 2.7% from 2.2% made in April) due mainly to the high food prices. But our policy will not be influenced by it alone,” Ueda told reporters.

He added that the Bank could consider raising the policy interest rate if the likelihood increases that underlying CPI inflation is anchored near 2%, even if it remains slightly below that level.

“Underlying CPI inflation hasn’t risen to 2% but it is rising steadily and moving toward 2%,” he said, noting that inflation was not sluggish, but gradually climbing.

Ueda reiterated that tariffs would put downward pressure on the economy and inflation. However, he said assessing the impact remains difficult, as current data are distorted by front-loaded demand and subsequent pullback. “Looking ahead, economic data will show the impact of the tariffs on economy and inflation,” he said.