By Leika Kihara
TOKYO (Reuters) – Bank of Japan Governor Kazuo Ueda said on Tuesday the central bank could raise interest rates next month, depending on economic and price data available at the time.
“Our decision on bond-buying taper and interest rate hikes are two different things,” Ueda told parliament.
“There’s a chance we could raise interest rates at our next policy meeting, depending on economic, price and financial data and information available at the time,” he said.
At its policy meeting on Friday, the BOJ decided to start trimming its huge bond purchases and announce a detailed plan in July on reducing its nearly $5 trillion balance sheet, taking another step toward unwinding its massive monetary stimulus.
The decision has heightened uncertainty on whether the BOJ could also hike short-term interest rates at its July 30-31 meeting or hold off until later in the year to avoid upending markets.
Ueda said the BOJ was not yet fully convinced that inflation will sustainably hit its 2% target, stressing the need to spend “a bit more time” to scrutinise various data before raising interest rates again.
(Reporting by Leika Kihara; Editing by Christian Schmollinger)
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