Governor Ueda’s G20 Press Conference, October 16
Overview
Bank of Japan Governor Ueda said at a joint press conference after the G20 that he had discussed with policymakers from other countries the effects of the Middle East situation and AI-related demand on the global economy and prices. With underlying inflation approaching 2% and financial conditions remaining accommodative, he outlined the basic policy of raising the policy rate in response to economic, price, and financial conditions and adjusting the degree of monetary accommodation. The timing and pace of rate increases will be considered after assessing the certainty of the outlook and the risks, taking into account developments in the Middle East, AI-related demand, and foreign exchange rates. Data since the September meeting were broadly in line with the outlook. He said policy board members would discuss how to describe the price outlook at the October meeting based on the information available by then. He also said that anchoring prices near 2% is a major policy objective, and that the neutral interest rate would be assessed in light of the cumulative effects of rate increases, among other factors.
Key points
- The policy rate will be raised in response to economic, price, and financial conditions, adjusting the degree of monetary accommodation.
- The timing and pace of rate increases will be decided after assessing the Middle East situation, AI demand, foreign exchange rates, and risks to the outlook.
- Anchoring prices near 2% is a major policy objective.
- He said data since the September meeting were broadly in line with the outlook, with no important information contradicting it.
Overview
Bank of Japan Governor Ueda reported that the G20 discussed the global economy and financial system, including the effects on the economy and prices of the Middle East situation and AI-related demand, at the joint press conference after the meeting in Bangkok on October 16, 2026.
The governor said he had been monitoring and analyzing developments in the Middle East and AI for some time, and that he felt there were no major differences of opinion among policymakers worldwide. He also said slightly more participants viewed AI demand as somewhat stronger than he did.
Details
With underlying inflation approaching 2% while financial conditions remain accommodative, the governor described a policy of raising the policy rate in response to economic and financial conditions. The timing and pace will be considered by examining the Middle East situation, AI-related demand, and foreign exchange rates, and assessing the certainty of the outlook and associated risks.
Japanese economic data since the September meeting were broadly in line with the outlook, and no important information contradicting the outlook was obtained at the meeting. He said policy board members would discuss the description of underlying inflation at the October meeting based on the information available by then.
The governor said underlying inflation was approaching 2% and that the policy phase had changed. He indicated that anchoring prices near 2% would be a major policy objective going forward.
He said there was no clear evidence indicating the level of the neutral interest rate, and that it would be assessed while observing the cumulative effects of rate increases, financial conditions, and their effects on the economy and prices. He had not been in particular contact with U.S. Treasury Secretary Bessent since Asheville. He had exchanged views with Chair Warsh but did not disclose specific details.