BoJ's Nakagawa says the Bank expects to continue raising rates as economy, prices improve

BOJ policy board member Junko Nakagawa Speech at a Meeting of the Okayama Club.

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• Economic Activity, Prices, and Monetary Policy in Japan

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Bank of Japan policy board member Junko Nakagawa said the central bank will continue making policy decisions carefully, balancing global trade uncertainty against evidence that inflation expectations are gradually firming toward target.

Nakagawa said the BOJ will weigh the high degree of uncertainty around global trade policies, particularly the effects of U.S. tariffs, when determining its next moves. She noted that Japanese firms are retaining a strong appetite for capital spending despite headwinds, reflecting underlying confidence and resilience in corporate investment.

On domestic demand, she said overall consumption remains firm, though spending on non-durable goods has weakened due to higher food prices. Service-sector demand has also stabilised after moderate gains earlier in the year.

Nakagawa emphasised that medium- to long-term inflation expectations are edging higher toward 2%, adding that the BOJ’s baseline outlook for overseas economies remains broadly unchanged. Her remarks underline a patient, data-driven stance as policymakers gauge how tariffs and cost pressures feed through to business activity and price trends.