{"id":2120,"date":"2025-12-04T06:38:38","date_gmt":"2025-12-04T06:38:38","guid":{"rendered":"https:\/\/asianforexhub.com\/?p=2120"},"modified":"2025-12-04T06:38:39","modified_gmt":"2025-12-04T06:38:39","slug":"bojs-ueda-cites-uncertainty-on-future-rate-hikes-as-neutral-rate-remains-elusive","status":"publish","type":"post","link":"https:\/\/asianforexhub.com\/tl\/bojs-ueda-cites-uncertainty-on-future-rate-hikes-as-neutral-rate-remains-elusive\/","title":{"rendered":"BOJ&#8217;s Ueda Cites &#8216;Uncertainty&#8217; on Future Rate Hikes as Neutral Rate Remains Elusive"},"content":{"rendered":"<h3 class=\"wp-block-heading\">AsianForexHub Market Pulse<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>BOJ Gov. Ueda confirmed <strong>some uncertainty<\/strong> regarding the number of future rate hikes, pending conclusion on the &#8216;neutral rate&#8217;.<\/li>\n\n\n\n<li>Ueda&#8217;s recent remarks spurred <strong>expectations<\/strong> for a rate hike at the Dec. 18-19 meeting.<\/li>\n\n\n\n<li>10-year JGB yield hit 1.920%, the highest level since July 2007.<\/li>\n\n\n\n<li>Markets are <strong>potentially<\/strong> pricing in a terminal rate of 1.5%.<\/li>\n\n\n\n<li>Wage growth momentum is a key factor in the BOJ&#8217;s policy decision.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><\/p>\n\n\n\n<p>The timing of Japan&#8217;s next shift in monetary policy appears to hinge on a hard-to-pin-down detail that fascinates economists: the so-called neutral level of interest rates. Bank of Japan Gov. Kazuo Ueda on Thursday said officials at the central bank are working to narrow a range for the neutral rate\u2014the level viewed as consistent with economic stability.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p class=\"has-vivid-red-color has-text-color has-link-color wp-elements-181e69a6c27d908c9d507f6ec7639fe6\"><em><strong><a href=\"https:\/\/direct-fxpro.com\/en\/partner\/2KGB2V96C?platform=web\" data-type=\"link\" data-id=\"https:\/\/direct-fxpro.com\/en\/partner\/2KGB2V96C?platform=web\">Access real-time insights and expert analysis on the Yen&#8217;s reaction to BOJ policy shifts.<\/a><\/strong><\/em><\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Central Bank Focuses on Elusive Neutral Rate<\/h3>\n\n\n\n<p>Such a decision will help inform the bank whether it needs to tighten policy more as it assesses economic data. Figuring out what the neutral rate looks like is a tightrope many central banks are trying to walk, and the BOJ&#8217;s deliberations have implications for global markets. The neutral rate is the level that keeps the economy at full employment with stable inflation, but it can&#8217;t be directly observed.<sup><\/sup> Instead, policymakers infer it from economic behavior. If borrowing and spending are strong and price pressures are rising, the current rate must be below neutral.<\/p>\n\n\n\n<p>On Thursday, the BOJ&#8217;s Ueda used an appearance before a parliamentary committee to state that officials hadn&#8217;t reached a conclusion on the neutral rate.<sup><\/sup> This served as a signal to markets that it is unclear when Japan&#8217;s tightening cycle will come to an end.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">&#8216;Some Uncertainty&#8217; on Terminal Rate<\/h3>\n\n\n\n<p>&#8220;The final decision on how high to raise the nominal interest rate appropriately depends on this factor, so I must mention there is some uncertainty,&#8221; Ueda said. He added that the BOJ will share its findings once it reaches a conclusion.<\/p>\n\n\n\n<p>Remarks from Ueda earlier this week sharply increased expectations that the bank will resume monetary tightening at its next meeting on Dec. 18-19. This has led to a jump in yields on government debt and a rebound in the yen. The yield on benchmark 10-year Japanese government bonds reached 1.920% on Thursday, the highest level since July 2007.<sup><\/sup> The yen was last trading at around 155.50 against the dollar.<sup><\/sup> Daiwa Securities strategist Eiichiro Tani suggested markets have almost priced in a potential terminal rate of 1.5%.<sup><\/sup><\/p>\n\n\n\n<p>Ueda previously pledged to discuss the pros and cons of raising the policy rate from the current 0.5% and make the appropriate decision at the upcoming meeting.<sup><\/sup> One of the most important factors in the BOJ&#8217;s decision-making will be early signs on the strength of pay hikes next year.<sup><\/sup> Ueda also reiterated that current monetary conditions in Japan are still accommodative, suggesting that policy will continue to support the economy even if the bank opts to raise interest rates.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p class=\"has-vivid-red-color has-text-color has-link-color wp-elements-62ea43972b1728cc31a1a7fd543e155e\"><em><strong><a href=\"https:\/\/direct-fxpro.com\/en\/partner\/2KGB2V96C?platform=web\" data-type=\"link\" data-id=\"https:\/\/direct-fxpro.com\/en\/partner\/2KGB2V96C?platform=web\">Unwind fears are hitting risk assets. Understand the dynamics of JPY funding and global macro shifts.<\/a><\/strong><\/em><\/p>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-uagb-image uagb-block-fea8b54c wp-block-uagb-image--layout-default wp-block-uagb-image--effect-static wp-block-uagb-image--align-none\"><figure class=\"wp-block-uagb-image__figure\"><a class=\"\" href=\"https:\/\/direct-fxpro.com\/en\/partner\/2KGB2V96C?platform=web\" target=\"\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" srcset=\"https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/11\/728\u00d790.gif ,https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/11\/728\u00d790.gif 780w, https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/11\/728\u00d790.gif 360w\" sizes=\"auto, (max-width: 480px) 150px\" src=\"https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/11\/728\u00d790.gif\" alt=\"728\u00d790\" class=\"uag-image-1707\" width=\"800\" height=\"99\" title=\"728\u00d790\" role=\"img\"\/><\/a><\/figure><\/div>","protected":false},"excerpt":{"rendered":"<p>BOJ Governor Kazuo Ueda stated there is &#8220;some uncertainty&#8221; on future rate hikes as officials work to determine the neutral interest rate, a key factor in their tightening path.<\/p>","protected":false},"author":1,"featured_media":2121,"comment_status":"open","ping_status":"open","sticky":false,"template":"elementor_theme","format":"standard","meta":{"_uag_custom_page_level_css":"","footnotes":""},"categories":[24,16,7],"tags":[],"class_list":["post-2120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-market-news","category-news-analysis"],"uagb_featured_image_src":{"full":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan.webp",2000,1335,false],"thumbnail":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan-150x150.webp",150,150,true],"medium":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan-300x200.webp",300,200,true],"medium_large":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan-768x513.webp",768,513,true],"large":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan-1024x684.webp",800,534,true],"1536x1536":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan-1536x1025.webp",1536,1025,true],"2048x2048":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan.webp",2000,1335,false],"trp-custom-language-flag":["https:\/\/asianforexhub.com\/wp-content\/uploads\/2025\/12\/bankofjapan-18x12.webp",18,12,true]},"uagb_author_info":{"display_name":"Asian Forex Hub Newsdesk","author_link":"https:\/\/asianforexhub.com\/tl\/author\/boyidzhamgmail-com\/"},"uagb_comment_info":0,"uagb_excerpt":"BOJ Governor Kazuo Ueda stated there is \"some uncertainty\" on future rate hikes as officials work to determine the neutral interest rate, a key factor in their tightening path.","_links":{"self":[{"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/posts\/2120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/comments?post=2120"}],"version-history":[{"count":1,"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/posts\/2120\/revisions"}],"predecessor-version":[{"id":2122,"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/posts\/2120\/revisions\/2122"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/media\/2121"}],"wp:attachment":[{"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/media?parent=2120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/categories?post=2120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/asianforexhub.com\/tl\/wp-json\/wp\/v2\/tags?post=2120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}