Following a press conference by BOJ policy board member Masu Ichikō (増一行), Tamagawa Toru (玉川徹) discussed what he saw as a sudden policy shift. The BOJ is reportedly expected to consider a rate hike at its next monetary policy meeting and has indicated plans to raise its policy rate to around 1.25%.
Tamagawa Toru (玉川徹), a commentator on a television program, referred to policy board member Masu Ichikō (増一行)'s renewed emphasis on the need for a rate hike ahead of the BOJ's next monetary policy meeting, where near-term monetary policy will be decided. At the press conference, the BOJ explained its policy of carefully examining and verifying foreign exchange rates, crude oil prices and international food prices. The BOJ is reportedly planning to decide at its next meeting to raise its policy rate to around 1.25%.
The presentation expressed the view that “the BOJ will continue to raise the policy rate and adjust the degree of monetary easing.” It also pointed to expectations that underlying inflation would approach 2% and concerns that tensions surrounding Iran could increase upward pressure on prices. The remarks emphasized the significance of the BOJ's rate hikes.
Tamagawa pointed to the BOJ's “sudden change” and said he viewed its longstanding pattern of reacting too late as beginning to change. He then speculated that, in light of developments in the United States, particularly the views of the US Treasury secretary, the BOJ's decisions could be influenced by the government and international pressure. This view can be understood against the backdrop of the situation surrounding Japan's response to US reflationary policy.
In conclusion, Tamagawa indicated that, while remaining mindful of US influence, he believed an environment was taking shape in which the Bank of Japan could smoothly implement the policies it should pursue. It was suggested that the course of future policy decisions therefore warrants careful attention.