By Makiko Yamazaki and Leika Kihara
TOKYO (Reuters) -Bank of Japan Governor Kazuo Ueda said on Tuesday the central bank will raise interest rates once it is convinced enough that economic and price growth will re-accelerate after a period of stagnation.
Ueda said the recent increase in food prices will likely slow as it is driven by one-off factors such as rising raw material costs.
By contrast, underlying inflation – or price rises driven by domestic demand and higher wages – will likely re-accelerate after a period of stagnation, Ueda said.
Given uncertainty over the price outlook and the fallout from U.S. trade policy, the BOJ must avoid having any preset idea on the future course of monetary policy, he said.
“We’ll continue to raise interest rates depending on improvement in economic and price situations if the economy and prices move in line with our forecasts,” Ueda told parliament.
“But it’s important to closely monitor domestic and overseas economic, price and financial market developments and judge without any preset ideas, as uncertainties over trade policies of each country remain extremely high,” he said.
(Reporting by Makiko Yamazaki and Leika Kihara; Editing by Christopher Cushing and Jacqueline Wong)
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