(Reuters) – The Bank of Japan raised interest rates in a mostly unexpected move on Wednesday and unveiled a detailed plan to slow its massive bond buying, taking another step towards phasing out a decade of huge stimulus.
Following are excerpts from BOJ Governor Kazuo Ueda’s comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters:
CONSUMPTION
“While rising prices may have affected consumption, it is moving on a firm note. Household sentiment is showing signs of bottoming out. Wage data has also shown rising pay. Our surveys also showed wage hikes broadening among smaller firms. We expect wage hikes to spread further, and underpin consumption and inflation.”
INFLATION
“We’ve also confirmed rises in services prices. We expect a moderate cycle of rising wages and inflation to continue. The weak yen is also pushing up import prices, so we need to be vigilant to the risk of an inflation overshoot.
“Even though we raised rates, real interest rates remain low. Our move won’t affect the economy much.”
RATE HIKES
“If the economy and prices move in line with our projection, we will continue to raise interest rates. In fact, we haven’t changed much our projection from April. We don’t see 0.5% as any key barrier when raising rates.”
(Reporting by Leika Kihara; Compiled and edited by Subhranshu Sahu)
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