Speaking at a Washington event during the International Monetary Fund (IMF)-World Bank meetings on Wednesday, Ueda highlighted the dangers of maintaining low interest rates for extended periods, warning that such a strategy could foster speculative market behavior.
"This could lead to a buildup of huge speculative positions, which could become a problem later," Ueda said. "We need to strike a balance between the two."
The comments emerged as the Japanese yen weakened to a three-month low against the U.S. dollar, briefly touching the 153-yen level.
The central bank chief indicated that Japan continues to face challenges in achieving its inflation target sustainably, as markets anticipate the BOJ to maintain its accommodative policy stance while other major economies tighten.
