At the June central bank meeting, Ueda mentioned potential rate hikes if prices continue to rise. Japan's inflation is above the 2% target, with the CPI rising 2.6% year-on-year in June. The Economic and Price Outlook predicts around 2% inflation until 2026.

The central bank decided to reduce government bond purchases from 6 trillion yen per month, halving them to 3 trillion yen per month by early 2026, leading to quantitative tightening.

Two committee members opposed further rate hikes, suggesting a need to review economic data and wage increases.

Following the end of negative interest rates, banks raised savings deposit rates, benefiting overall household savings and making banks the biggest beneficiaries.

Bank of Mitsubishi (8306) and Bank of Mitsui (8316) hold a significant advantage

Jul 31 2024

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