BoJ’s Ueda says no comment on daily moves, markets price in high likelihood of September rate hike

Bank of Japan (BoJ) Governor Kazuo Ueda on Tuesday held talks with US Treasury Secretary Bessent on the sidelines of the G20, but giving no details on what was discussed. Ueda said central banks discussed the need for improved communication to achieve appropriate monetary policy as the global environment changes. He declined to comment on markets pricing in a strong chance of a September rate hike.

Key quotes

Discussed with central banks need to communicate for suitable monetary policy to achieve price stability amid changing global environment. 

Held talks with US Bessent but no details disclosed. 

No comment on daily moves, markets price in high likelihood of September rate increase. 

Data since July meeting broadly matches projections in July quarterly report. 

Our fundamental approach to monetary policy remains mostly unchanged since July. 

Focus on Middle East conflict, oil demand, FX impact on economy and prices in policy guidance. 

Will discuss suitable policy at next meeting while examining economy, prices, financial conditions. 

Will assess if economy, prices align with our scenario along with risks. 

Increased likelihood of economic scenario and inflation risks to be discussed at next board meeting. 

Monetary conditions remain loose, so we want to keep hiking rates. 

Policy rate hiked five times, need to carefully assess cumulative impact on economy. 

We will also consider upside price risks in policy deliberations. 

Market reaction

At the time of writing, the USD/JPY pair is up 0.02% on the day at 160.20.