Bank of Japan Governor Kazuo Ueda downplayed the idea that Japan has achieved victory over inflation, stating that it would be up to the government to make any such declaration. The comments signal that the BOJ is reluctant to claim a durable end to inflation, which keeps alive expectations for further policy normalization rather than a pause. The main transmission channel runs through rate differentials: a central bank that resists declaring victory over inflation tends to keep yen-funded carry trades under pressure from rising Japanese short-term yields, which supports the yen relative to the dollar. Japanese government bonds and yen crosses such as USD/JPY are most directly exposed, along with Nikkei equities that are sensitive to yen strength. Traders should watch the next Tokyo national CPI release and the upcoming BOJ policy meeting for any signal on the timing of the next rate increase.
BOJ governor Ueda tries to play down inflation victory declaration, says it will be up to the government to call that
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