Bank of Japan Policy Board Member Koeda Junko (小枝 淳子) said there was no need to be overly cautious about rate hikes, noting that financial conditions remain accommodative and inflation risks are appreciable. She said future rate hikes would be adjusted in a timely manner.
At a meeting on financial and economic matters held in Kumamoto City, Bank of Japan Policy Board Member Koeda Junko (小枝 淳子) said there would be no excessive caution about rate hikes. She said inflation risks were appreciable and indicated that financial conditions remained accommodative. Regarding future rate-hike decisions, she said adjustments would be made in a timely manner.
The BOJ has set a goal of stabilizing underlying inflation at 2%, and explained that underlying inflation has generally settled at around 2% over the past year or so. Regarding the neutral interest rate, she indicated that it was "above 1%" while declining to specify a particular level. Following the policy rate hike to 1.25% at the September Monetary Policy Meeting, the rate is now above the lower end of the range.
Regarding the yen, she said a "safe-haven yen appreciation" was unlikely in light of the turmoil in the Middle East, while noting that pass-through of higher costs has become more active against the backdrop of rising import prices caused by yen depreciation.