Bank of Japan Governor sees positive dynamics of consumption and expects economy to recover

Bank of Japan (BOJ) Governor Kazuo Ueda has expressed optimism about the level of consumer activity in the country. Despite the challenges that the national economy is facing due to Donald Trump's import tariffs, it is showing signs of recovery. This gives the Japanese regulator reasons to wean the economy off monetary stimulus.

According to Reuters, interest rates are likely to remain unchanged at the central bank's meeting in March, which will be held as early as next week. However, the officials have yet to determine their future strategy. Japan's inflation and market volatility may prompt them to raise borrowing costs in May, the agency reported.

Since 2022, Japan has seen wage growth lag behind the rise in consumer prices. This results in higher costs of living. Nevertheless, in his statement, Ueda emphasized the positive changes in domestic indicators. Wages keep growing, although still lagging behind inflation. Meanwhile, consumption dynamics in the country are beginning to improve, Reuters concluded.