The text of BOJ Deputy Governor Himino Ryozo (氷見野 良三)'s speech was made public, and passages signaling a September rate hike have been identified. Expectations for a September rate hike have strengthened in the market, with the probability of a hike increasingly priced in.
The text of a speech delivered by Bank of Japan Deputy Governor Himino Ryozo (氷見野 良三) in Saitama Prefecture on 27 August was made public. Much of the speech reiterated the Bank's statement from the previous monetary policy meeting in July and the content of Governor Ueda Kazuo (植田 和男)'s press conference, and it is said to have offered limited new detail.
Taken as a whole, the speech conveyed a nuance signaling a rate hike at the September meeting, and expectations for a September hike are said to have strengthened in financial markets. Reports indicate that the probability of a rate hike priced in by the market has reached nearly 85%.
The central point of the explanation is said to have been the importance of stabilizing the underlying inflation rate at around 2% and the need to pay greater attention to upside inflation risks. The speech also referred to the possibility of an acceleration in the pace of rate hikes, and it is said that if a hike is carried out at the September meeting, the interval since the previous hike in June would be approximately 3 months. It was also said that attention is being paid to developments in BEI.
The effects of rising crude oil prices and yen depreciation were cited, as were longer-term inflationary factors stemming from the AI boom. The speech is said to have conveyed the idea that vigilance over upside inflation risks will intensify in future policy management.
According to comments by Kiuchi Toshihide (木内 登英) of Nomura Research Institute, the possibility of implementing a 0.25% rate hike at the September meeting and a continued acceleration in the pace of rate hikes through around the beginning of next year were said to have been signaled.