Bank of Japan Governor Says Inflation Nears 2 Percent Target

Bank of Japan Governor Kazuo Ueda announced on Monday that underlying inflation is quite close to the central bank's 2 percent target. Speaking before parliament, Ueda attributed the inflationary pressure to a moderate economic recovery, a tight job market, and strong global demand for artificial intelligence, which has increased exports and capital expenditure.

Ueda also noted that rising raw material costs stemming from conflict in the Middle East have contributed to price increases. He argued that the bank must adjust the policy rate at an appropriate pace to prevent spikes in long-term bond yields and avoid market concerns that inflation might overshoot the target.

These remarks come ahead of a key policy meeting later this month. During that session, the Bank of Japan will release updated quarterly growth and inflation forecasts.