Japan may continue to increase its policy interest rate to tackle the risk of the underlying inflation rate crossing the 2% price stability target, Bank of Japan Governor Kazuo Ueda said in a Tuesday speech.

While Japan's economy is recovering moderately, with higher exports due to AI-related demand and solid corporate profits, some areas of weakness persist amid the Middle East conflict, Ueda added.

Business fixed investment is on a moderate upward trend, with business sentiment favorable and private consumption stable, Euda said while speaking at the 2026 National Securities Convention.