By Leika Kihara
WASHINGTON (Reuters) -Bank of Japan Governor Kazuo Ueda said on Friday the central bank will “very likely” be raising interest rates if underlying inflation continued to go up.
Ueda also said the central bank will find a way to reduce the amount of its Japanese government bond (JGB) purchases, though the actual timing was still undecided.
Having ended its various unconventional monetary easing measures in March, the BOJ has brought more flexibility to its policy and may change its short-term interest rate target depending on how upcoming data unfold, Ueda said.
“We will proceed cautiously, initially assessing the impact of our recent policy changes on the economy and inflation, then considering further adjustment as deemed appropriate, perhaps extracting insights on the neutral rate along the way,” Ueda said in a seminar hosted by the Peterson Institute for International Economics.
“Irrespective of what the data will say in the near future, we will like to find a way and timing to reduce the amount of JGB purchases,” he added.
