Speaking in Kumamoto, BOJ Policy Board member Koeda Junko (小枝 淳子) indicated that there is ample scope for further rate hikes and assessed the current policy rate of 1.25% as near the lower bound.
BOJ Policy Board member Koeda Junko (小枝 淳子) delivered a speech in Kumamoto and reiterated her view that there was no need to be “excessively cautious” about raising the policy rate.
At its September monetary policy meeting, the BOJ raised the policy rate to approximately 1.25%, its highest level in around 31 and a half years.
The neutral rate is estimated at 1.1%–2.5%, and the current rate of 1.25% was assessed as being near the lower bound, indicating scope for further rate hikes.
The BOJ has set a target of stabilising the underlying inflation rate at 2%. Koeda said that, taking the past year or so as a whole, she understood inflation to have been around 2%.