BoJ Governor Ueda says Japan is experiencing a positive cycle of rising wages and recovering prices, while anchoring core inflation near 2% is becoming increasingly important

Japan's steady economic recovery and tight labour market are fuelling inflation. Robust global AI demand is boosting domestic capex, exports and goods prices. Middle East conflict is driving energy costs and supply-driven inflation pressures. It would be inappropriate to signal in advance when the BoJ might conduct emergency bond market operations. Bank will review market conditions including speed of long-term rate rise and signs of market instability to decide on intervention. Long-term interest rates would likely rise steadily in line with any increases in the BoJ's short-term policy rate. Financial conditions remain accomodative. Fiscal spending boosts demand and puts upward pressure on prices and wages.