Bank of Japan (BoJ) board member Naoki Tamura is back on the wires, via Reuters, clarifying his earlier remarks on the central bank’s interest rate.
Key quotes
Not saying that neutral rate should be 1%.
Difficult to specify terminal rate at this point.
Will try to find where neutral rate should be while examining how economy prices respond to rate hikes.
Upward risks for prices is gradually increasing.
Would be good if terminal rate stands around neutral rate in the latter half of next fiscal year.
No preset idea about the pace of interest rate hikes.
While keeping neutral interest rate of 1% in mind, will raise interest rates in stages in line with the likelihood of achieving inflation target.
Pace of interest rate hikes may not necessarily be once half a year.
Not placing focus on the fact that the policy rate of 0.75% has not been experienced in the past 30 years.
Not necessarily moving forward when inflation target would be achieved, but the range has been narrowed.
Will decide whether inflation target is achieved from various indicators, hearings of companies.
BoJ’s JGB purchases are for monetary policy purposes only, not for fiscal purposes.
Tamura said earlier this Thursday that the central bank must raise rates to approximately 1% by the latter half of fiscal 2025.
Market reaction
USD/JPY is recovering further ground on these above comments. At press time, the pair is losing 0.14% on the day to trade near 152.35.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.