By By Leika Kihara
OSAKA (Reuters) -The Bank of Japan can afford to spend time scrutinising market and overseas economic developments in setting monetary policy, governor Kazuo Ueda said on Tuesday, suggesting that the central bank was in no rush to raise interest rates further.
Ueda reiterated that the BOJ will raise interest rates if trend inflation accelerates towards its 2% target as projected, a sign there was no change to its stance to gradually push up borrowing costs from still near-zero levels.
But he warned of risks surrounding the outlook, such as volatile financial markets and uncertainty on whether the U.S. economy can achieve a soft landing.
“We must conduct policy in a timely, appropriate fashion without having any pre-set schedule in mind, taking into account various uncertainties,” Ueda said in a speech to business leaders in the western Japan city of Osaka.
The yen’s “one-sided declines” have reversed since August and significantly lowered the risk of an inflation overshoot by moderating the pace of rise in import prices, Ueda said.
“We need to scrutinise market moves and overseas economic developments behind them in setting monetary policy. We can afford to spend time doing this,” he said.