BOJ’s Ueda sees wages and inflation reinforcing rate-hike case

BOJ Governor Ueda, in a speech at the Keidanren on December 25, 2025, indicated that underlying inflation is approaching the 2% target, bolstering the case for rate increases. Ueda pointed to tight labor market conditions that are likely to persist unless disrupted by significant economic shocks, which could sustain upward pressure on wages. He noted that companies are increasingly passing on higher costs, indicating a virtuous cycle of rising wages and prices that the BOJ has long sought. Ueda emphasized that the central bank is prepared to continue raising rates based on real economic developments rather than a preset approach, signaling a shift away from ultra-easy monetary policy.