Bank of Japan Policy Board Member Koeda Junko (小枝 淳子) said she would not be overly cautious about additional rate hikes going forward and that the neutral interest rate could be above the lower end of the BOJ's estimated range, around 1%.
In remarks at a meeting on financial and economic matters held in Kumamoto Prefecture, Policy Board Member Koeda said she would not be overly cautious about future rate hikes and acknowledged that inflation risks were appreciable.
Regarding the neutral interest rate estimated by the BOJ, she said it was "appreciably above" the current lower bound of 1.1% and called for timely additional rate hikes while carefully monitoring economic and price developments.
She also discussed methods for estimating the neutral interest rate, saying that, in light of changes in the long-term interest-rate environment, "the convergence value may have shifted up to a higher level than before." She indicated that this could mean the neutral interest rate is above the benchmark for the lower end of the BOJ's estimated range.
Regarding domestic price trends, she explained that underlying inflation is generally viewed as around 2% and that year-on-year price increases are being seen in more than 70% of goods and services. She also flagged the possibility that higher import prices and stronger global demand could push up prices.