Bank of Japan Governor Kazuo Ueda stated at a press conference on Tuesday following the interest rate decision that the central bank still has the possibility of raising its benchmark interest rate, provided the economy does not slow significantly and upside risks to prices become more pronounced.
He indicated that if the risk of an economic downturn or a major economic adjustment remains relatively limited, and upside risks to prices become more evident, "I believe there is a possibility of an interest rate hike."
The aim is to conduct policy while taking into account that interest rates are below the neutral level.
Governor Ueda also commented that, while oil prices are a concern, the likelihood of another oil crisis on the scale of the 1970s is not high.
The Bank of Japan remains in the process of raising interest rates toward a neutral level.
He further added that the central bank faces limitations in narrowing the estimated range for the neutral interest rate, which is considered a level that neither stimulates nor restrains economic activity.
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