The Bank of Japan raised its policy rate from around 1.0% to around 1.25%. Nagashima Kazushige (長嶋一茂) pointed to the benefits for the wealthy from higher interest rates and the increased burden on people with borrowings.
At its monetary policy meeting on the 18th, the Bank of Japan decided to raise its policy rate from the current level of around 1.0% to around 1.25%. The hike brought the rate to its highest level in 31 years, while the interval since the previous hike in June was 3 months, the shortest since Governor Ueda Kazuo (植田和男) took office.
At a press conference, Governor Ueda Kazuo (植田和男) explained that “the situation has changed,” citing the risk of prices rising above the 2% target. He indicated that the Bank intends to continue raising rates, with reports saying the aim is to curb excessive price increases caused by surging crude oil prices and yen depreciation.
Nagashima Kazushige (長嶋一茂) pointed out that while wealthy people may earn additional interest income as a result of the rate hike, those with borrowings and mortgage holders may face a greater burden. As high prices continue, he also referred to the growing burden on household finances in Japan and delays in wage growth.