BOJ increasingly needs interest rate hike: policymaker Noguchi
The Bank of Japan faces a growing need to raise its policy interest rate as the country nears its 2 pct inflation target, BOJ policymaker Asahi Noguchi said Monday.
"Various economic indicators for Japan show steady progress in achieving the 2 % price stability target," Noguchi said in a speech in the city of Sapporo in Hokkaido, northernmost Japan. "This suggests that the need to adjust the policy interest rate is increasing more than ever."
The Japanese central bank last raised the policy rate in January to 0.5 from 0.25.
Noguchi said that the global economy "faces a new risk" stemming from the high tariff policy of the United States, the impact of which is being closely monitored. He underlined the need for the BOJ to "assess underlying inflation as carefully as possible for the time being" to gauge the effects of US levies on the Japanese and global economy.
"I believe Japan will, in the not-too-distant future, require a new policy perspective that addresses the upside risks" to prices, the policymaker said. "The bank needs to flexibly adjust its monetary policy while examining price developments, in response to economic developments."
In the BOJ's latest two-day policy-setting meeting through Sept. 19, at which members decided to keep the policy rate unchanged at 0.5 %, policymakers Naoki Tamura and Hajime Takata argued against leaving the rate the same and called for an increase.
Noguchi's remark came amid anticipation in financial markets for a possible policy rate hike at the BOJ's next policy-setting meeting in October.
[Copyright The Jiji Press, Ltd.]
