BOJ board member Masu (増) said underlying inflation is not currently expected to rise significantly above 2%, while pointing out that it is “unnatural” for the policy rate to be below the lower end of the neutral range and expressing a preference for early correction. Ahead of next week’s meeting, Masu (増) indicated that the BOJ would continue its assessment.
BOJ board member Masu (増) said that underlying inflation is not currently expected to rise significantly above 2%. This suggested that a substantial 0.5 percentage-point rate hike is not necessarily required at present.
At the same time, Masu (増) said it is “unnatural” for the policy rate to be below the lower end of the estimated neutral-rate range and expressed the view that this should be corrected promptly. The estimated neutral-rate range is 1.1%–2.5%, and the current policy rate is considered to be below its lower end.
Masu (増) also said that the neutral rate cannot be determined precisely, and responded that it would be necessary to see whether monetary policy remained accommodative even if the policy rate reached 1.25%.
Regarding next week’s monetary policy meeting, Masu (増) did not state whether rates should be raised, indicating a policy of assessing developments in the yen and commodity markets before discussing the matter at the following meeting. Some market participants believe that a rate hike is already priced in.