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BoJ's Uchida: Japan's economy is recovering moderately

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BoJ's Uchida: Japan's economy is recovering moderately

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New update 2025.10.17 15:40
BoJ's Uchida: Japan's economy is recovering moderately

update 2025.10.17 15:40

Bank of Japan (BoJ) Deputy Governor Shinichi Uchida said on Friday that the Japanese economy is recovering moderately, albeit with some weak signs. Uchida added that the central bank will keep raising the rate if the economic outlook is met. 

Key quotes

Japan's economy is recovering moderately.
Tankan survey showed business sentiment turns positive for some manufacturers.
That as uncertainty over US tariffs outlook recedes.
Economy to pick up pace after moderating on tariffs
Business sentiment looks solid overall.
Underlying inflation likely to stagnate for some period before reaccelerating gradually.
Uncertainty surrounding overseas economic developments remains high.
To continue raising interest rates if economy, prices move in line with our forecasts.

Market reaction   

At the press time, the USD/JPY pair is down 0.33% on the day to trade at 149.95. 

Bank of Japan FAQs

The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank's policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.

The Bank's massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ's policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.

A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ's 2% target. The prospect of rising salaries in the country - a key element fuelling inflation - also contributed to the move.



Date

Created

 : 2025.10.17

Update

Last updated

 : 2025.10.17

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