Bank of Japan Deputy Governor Himino Ryozo (氷見野良三) said at a meeting in Saitama Prefecture that timely rate hikes could help avoid sharp tightening in the future, while warning of upside risks to prices. He said it was important to stabilize underlying inflation at around 2% and indicated that the Bank would continue discussions at every policy meeting.
Bank of Japan Deputy Governor Himino Ryozo (氷見野良三) spoke at the Financial and Economic Meeting in Saitama Prefecture, saying it was necessary to remain alert to the risk of underlying inflation rising as high as 2%. He said timely rate hikes would help avoid sharp tightening in the future.
The deputy governor emphasized the need for thorough discussions at every Monetary Policy Meeting and pointed to the importance of stabilizing underlying inflation at around 2%. He said financial conditions were currently accommodative and that the Bank should appropriately reduce the degree of accommodation through rate hikes.
He explained that the timing and pace of policy rate adjustments would be considered while assessing developments in the Middle East, expanding demand related to AI and the impact of currency movements. He also noted that yen depreciation could push up prices and indicated that the Bank would continue to pursue flexible, data-based policy management.
Many in the market expect the Bank to proceed with a rate hike at its September meeting, and Deputy Governor Himino Ryozo's (氷見野良三) remarks are being viewed as consistent with those expectations. The Bank raised its policy rate to 0.75% at its July meeting and has indicated that it is prepared to raise rates further, although overseas risks remain.