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Ueda signals low bar for further rate hikes

Bank of Japan Governor Ueda today indicated that it wouldn't take much for the Bank to hike interest rates further in the second half of the year. The extreme labour shortages coupled with persistent price pressures reported in the Bank's latest Tankan survey certainly add to the case for further policy tightening. However, we still think that underlying inflation will fall below 2% in the second half of the year, forestalling further rate hikes.

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