BOJ Policy Board member Koeda Junko (小枝淳子) gave a speech in Kumamoto and indicated that she intends to continue raising interest rates. She said the neutral interest rate should be kept in mind when deciding on rate hikes.
Bank of Japan Policy Board member Koeda Junko (小枝淳子) gave a speech in Kumamoto, saying that there was no need to be overly cautious about raising interest rates, and stressed her commitment to continuing to raise the policy rate. Regarding the timing of rate hikes, she said only that it should be adjusted as appropriate.
The market expects the Bank of Japan to raise the policy rate to around 1.25% at its September Monetary Policy Meeting, with the next meeting, scheduled for the 29th and 30th, attracting attention. Koeda cited the neutral interest rate as a benchmark for policy decisions and pointed out that the current neutral interest rate is higher than 1%.
Her remarks that the neutral interest rate should be kept in mind included the market view that, taking potential growth and other factors into account, the rate could exceed 2%. There is also a view that the Bank of Japan could raise the policy rate to roughly the level of the neutral interest rate.
The analysis indicated that the domestic economy is generally not in poor condition, while the view was expressed that broad-based price increases were continuing.