BOJ Governor Ueda Warns Delayed Rate Hikes Could Lift Yields as Inflation Approaches 2%

Bank of Japan Governor Kazuo Ueda warned parliament that delayed interest rate adjustments could prompt inflation overshoots and lift long-term bond yields, reinforcing expectations for continued policy normalization. While the BOJ is widely expected to hold its benchmark rate at 1.25% at the October 29-30 meeting, markets are pricing in potential tightening to 1.50% in December, with odds previously placed at 75%. Ueda noted underlying price pressures are nearing 2%, supported by tight labor conditions, AI demand, and raw material costs, while USD/JPY traded near 158.00.