BOJ to continue to raise policy interest rate: board member
FUKUI, Japan (Kyodo) -- The Bank of Japan will continue to raise its key interest rate and adjust the degree of monetary accommodation, BOJ board memb
The Bank of Japan (BOJ) plans to keep increasing its key interest rate and adjust the level of monetary easing, according to board member Kazuyuki Masu. In an upcoming policy meeting, the bank intends to raise its policy rate to approximately 1.25 percent, following a previous increase to 1.0 percent. This is the highest level in 31 years.
Masu emphasized that ensuring underlying inflation does not significantly exceed 2 percent is crucial. Currently, underlying inflation is very close to the BOJ's 2 percent price stability target. The board member warned that inflationary pressures could intensify due to the situation in Iran, which has led countries worldwide to adopt rate hikes in response to inflationary concerns. U.S. President Donald Trump expressed uncertainty about the Iran conflict ending before the November midterm elections.
Financial conditions in Japan remain accommodative, and if inflation accelerates, the BOJ might need to implement a rapid policy rate hike. Masu also highlighted strong demand in artificial intelligence as another factor contributing to upward price pressure. He noted that this surge has driven up the prices of semiconductors and other goods.
The BOJ's main focus now is on gradually reducing monetary accommodation before inflation becomes more persistent, while remaining open to further rate increases as economic and price conditions change.
Written by urgent.news from The Mainichi's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
