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BOJ’s Ueda: Underlying Inflation Now Very Close to 2%

Bank of Japan Governor Kazuo Ueda said the country’s underlying inflation rate is now very close to 2%, noting that a virtuous cycle of wages and prices rising in tandem has been restored. He said it is crucial for core inflation to hold stably around 2% and that wage gains are continuing to pass through to goods and services prices. Ueda also said drawing a clear line between demand-pull and cost-push inflation is difficult.

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AI take

Ueda's framing matters for crypto and RWA markets because a credible return of Japan's underlying inflation to target strengthens the case for a normalization path in Japanese monetary policy, which has long been the anchor of global liquidity via yen-funded carry. The explicit nod to a restored wage-price cycle, and his reluctance to sharply separate demand-pull from cost-push pressures, suggests the BOJ is building tolerance for sustained inflation rather than treating it as transitory. Whether core inflation actually holds stably around 2% — and whether wage pass-through persists into services — is the open question that determines how quickly policy normalization proceeds.

Generated by AI for reference only.

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