BoJ's Ueda: Close to inflation target but not quite there

Bank of Japan Governor Kazuo Ueda said on Tuesday that while the Japanese central bank are now closer to the inflation target than any time during the last few decades, the BoJ is not quite there.

Key quotes

While many of my G7 colleagues looked relieved by the progress made in the fight against inflation, they also acknowledged new challenges such as heightened trade policy uncertainty and dealing with more frequent supply-side shocks.
In Japan, we are still grappling with the longstanding challenge of achieving our 2% inflation target in a sustainable manner.
While we are now closer to our inflation target than at any time during the last few decades, we are not quite there.
Inflation in Japan has picked up again, driven primarily by increases in food prices, most notably rice prices.
Japan's real policy rate remains deeply negative.
In light of growing uncertainties, particularly those related to trade policy, we have recently revised down our economic and inflation outlook.
But we continue to expect underlying inflation to gradually move toward 2% over the second half of our forecast horizon.
There are both upside, downside risks around our baseline scenario.
Risks to economic activity, prices are skewed to downside for fiscal 2025 and 2026.
To the extent incoming data allows us to gain more confidence in our baseline scenario, as economic activity and prices improve, we will adjust degree of monetary easing as needed to ensure achievement of sustainable 2% inflation target.
Considering extremely high uncertainties, it is important for us to judge whether the outlook will be realised, without any preconceptions.

Market reaction  

At the time of writing, the USD/JPY pair is trading 0.32% lower on the day at 142.38.