BoJ Governor Ueda Defended The Rate Rise In a Parliamentary Meeting

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Speaking at an off-session meeting of the House of Representatives Committee on Financial Affairs, Ueda emphasized the BOJ’s careful monitoring of capital and financial market developments to assess their impact on economic and price forecasts.

The meeting, also attended by Finance Minister Shunichi Suzuki, was convened to discuss the recent stock market decline and the yen’s surge following the BOJ’s decision to raise interest rates at the end of July. Ueda noted that both domestic and international financial markets remain unstable, and the BOJ will continue to closely monitor them with heightened vigilance.

The Nikkei225 had lost 25% from its high since the 11th of July but then recovered and now is 9% away from its record high.The yen’s rapid appreciation in early August, which has seen a 12% gain versus the greenback, has stabilized with a 9% gain from July highs.

Ueda said that the fast correction seen in both FX and local stock market was driven also by a weakening of the dollar which amplified the rate hike effect of the central bank of Japan.