The BOJ governor said at a news conference that financial conditions remain accommodative. Meanwhile, bank lending trends and the impact on households are emerging as areas of focus, with attention also on the impact on variable-rate mortgage borrowers.
At a press conference held by the BOJ governor, it was reiterated that financial conditions remain "accommodative." Long-term interest rates are said to have already risen sufficiently, and it was explained that the focus may shift next to bank lending trends.
In addition to the textbook transmission route through which higher interest rates have an impact, more complex channels were also cited, including the possibility that higher rates could create concerns over funding as the economy deteriorates, increasing demand for funds. It has also been pointed out that banks are becoming more proactive in lending, indicating that the situation is not uniform.
Another issue is the impact on households. In particular, given that many mortgage borrowers currently choose variable-rate loans, it has been pointed out that rate hikes could significantly increase the burden on households.