BOJ May Hit Price Target in 2nd Half of FY 2025: Policymaker

Naha, Okinawa Pref., Oct. 16 (Jiji Press)–Bank of Japan policymaker Naoki Tamura on Thursday expressed the view that the central bank’s 2 pct price stability target may be achieved in the second half of the current fiscal year through next March. “The possibility of the BOJ hitting the target during the second half of fiscal 2025 cannot be ruled out,” he said at a press conference in Naha, the capital of Okinawa Prefecture, southernmost Japan. He thus suggested that the goal may be achieved earlier than in the currently estimated second half of the bank’s ongoing economic outlook period running through fiscal 2027, due to the impact of the Japan-U.S. tariff accord and rising food prices. At the BOJ’s Sept. 18-19 policymaking meeting, Tamura, a member of its Policy Board, proposed a hike in the central bank’s policy rate to around 0.75 pct from around 0.5 pct. But the proposal was turned down. Asked if he would propose a rate increase again at the next policy meeting set for Oct. 29-30, Tamura said, “I can’t say anything definite at this point.” He added, however, that “we should adjust the degree of monetary easing and bring the interest rate a little closer to the neutral rate” in light of the improvement in business sentiment and other positive factors. Tamura also said that a weaker yen increases the risk of price rises. Noting that more Japanese companies pass on higher costs blamed on the yen’s depreciation to their product and service prices, he said, “Currency fluctuations are more likely to affect prices than in the past.” Tamura declined to comment on the inauguration of Sanae Takaichi, a supporter of monetary easing, as the new leader of the ruling Liberal Democratic Party. END [Copyright The Jiji Press, Ltd.]