Bank of Japan Governor Kazuo Ueda faced warnings from BIS General Manager Agustin Carstens at an international forum hosted by the BOJ, stating that the global era of ultra-low interest rates is over. Carstens cautioned that failure to restrain rising debt could lead to worsening inflation and severe currency fluctuations.

On the same day, Ueda hinted that if the economic recovery remains steady, the BOJ would consider adjusting its long-standing monetary easing policy, signaling a clearer global policy shift. Carstens emphasized that global financial markets have recognized certain unsustainable paths and could suddenly lose stability when faced with significant imbalances.

He pointed out that defaults on public debt could lead to rising inflation and currency depreciation, with central banks unable to stabilize the situation in a narrow timeframe, urging governments to establish transparent and credible debt repayment mechanisms and avoid excessive monetary policy adjustments.

Ueda noted that while the impact of rising food prices is gradually dissipating, inflation is approaching the 2% target, and close observation is needed to see whether grain prices will exert long-term pressure on overall inflation. As market expectations for future inflation continue to increase, the yen briefly strengthened to 142.1 per dollar before dropping back to the 144 range.