Bank of Japan Governor Ueda Says 2% Inflation Has Not Yet Become Embedded in Japanese Society

Kazuo Ueda, governor of the Bank of Japan (BOJ), said it is unclear how long inflation will remain at the central bank's 2% target, and he acknowledged that the public has not yet come to treat the target as normal, The Japan Times reported. He spoke at the 2026 Michel Camdessus Central Banking Lecture at the International Monetary Fund in Washington on November 6. "Whether we could stay in that equilibrium for a very long time to come, we still don't know," Ueda said, according to Reuters, adding that he sees "some upside risks" to prices.

Headline inflation is running above the target. Ueda said consumer prices are now around 3% and are expected to rise further into early next year as higher energy costs reach consumers, according to one summary of his remarks. He gave no specific guidance on further rate increases in his exchange with IMF Managing Director Kristalina Georgieva. The BOJ's next policy meeting ends on December 18.

Japanese savers carry the cost of the gap between prices and deposit rates. Deposits above the insurance cap of 10 million yen per depositor per bank have reached about $890 billion, swollen by inheritances, Nikkei Asia reported. Equity holdings fell sharply this week, when the Nikkei 225 entered a bear market on Friday. Reuters separately reported that the government plans to use proceeds from BOJ asset sales as the AI-driven sell-off adds to fiscal concerns.