Bank of Japan Deputy Governor Himino Ryozo (氷見野 良三) said in a speech on 27 August that the Bank would continue raising interest rates and emphasized upside risks to prices. Market attention is intensifying ahead of the next Monetary Policy Meeting.
At a financial and economic gathering held in Saitama City, Bank of Japan Deputy Governor Himino Ryozo (氷見野 良三) said, “We will continue raising the policy rate and adjust the degree of monetary easing,” signaling a positive stance toward sustained rate hikes. He said that real interest rates remain negative across most areas and expressed the view that accommodative financial conditions are being maintained.
The Bank of Japan only recently raised its policy rate to 1.0% in June, while price pressures are considered persistent. Himino Ryozo (氷見野 良三) explained that multiple factors, including higher crude oil prices resulting from the situation in the Middle East, the weakening yen and a surge in AI-related demand, are affecting underlying price trends. He emphasized the need to pay greater attention than before to the “upside risk to prices” of persistently exceeding the 2% price stability target. This made his hawkish stance clearer.
Market expectations are growing that the Bank will deliver an additional rate hike at the next Monetary Policy Meeting on 17 and 18 September. With Governor Ueda Kazuo (植田 和男) absent from a U.S. economic symposium, the speech is reportedly being viewed as an important communication from the Bank’s executive leadership.
He did not refer to a specific timing for future additional rate hikes, saying that the Bank would “carefully consider” the matter at each meeting, while indicating that policy decisions would be made in a timely and flexible manner based on economic and price data. Markets are closely watching the next meeting and the Bank of Japan’s progress toward monetary policy normalization.