Japan's central bank likely to raise interest rates soon
Japan's central bank is thinking about raising interest rates soon, as prices keep climbing.
Market participants say the current rate will likely stay at 1.25% for now, but it could go up to 1.5% by December.
This comes as Japan faces higher costs for raw materials and big demand for AI technology worldwide.
BOJ Governor Ueda warns on yields
Ueda warned that failing to adjust monetary policy at an appropriate pace could lead to a sharper rise in long-term bond yields, which would hurt the economy.
"With underlying inflation approaching 2% and financial conditions remaining accommodative, failing to adjust our policy rate appropriately could push up long-term interest rates by stoking market concern over an inflation overshoot," he explained.
The BOJ is trying to balance keeping inflation in check without putting extra pressure on Japan's already stressed government finances.