Bank of Japan Governor Kazuo Ueda reiterated on Tuesday the central bank's commitment to increasing interest rates if underlying inflation nears its two per cent target. The BOJ has stated that despite core consumer inflation surpassing the two per cent target for three years, underlying inflation, which is measured by various indicators and reflects demand-driven price pressure, still falls short of the target. Ueda stated that the BOJ is maintaining negative real interest rates to ensure that core inflation reaches two per cent and remains stable at that level in a sustainable manner. "Once we have more conviction that underlying inflation will approach 2% or hover around that level, we will continue to raise interest rates to adjust the degree of monetary support," Ueda told parliament. The BOJ concluded a decade-long, extensive stimulus program last year and increased short-term interest rates to 0.5 per cent in January, believing that Japan was close to consistently achieving its two per cent inflation target. Attribution: Reuters Subediting: M. S. Salama
