Several BOJ Policymakers Positive about Rate Hike: Meeting Summary

Tokyo, Nov. 10 (Jiji Press)–Several policymakers of the Bank of Japan at its Oct. 29-30 policy-setting meeting expressed the view that the central bank should positively consider raising its policy interest rate, according to a summary of opinions at the meeting released Monday. The summary showed that a member of the BOJ’s Policy Board said, “It is likely that conditions for taking a further step toward the normalization of the policy interest rate have almost been met.” Regarding the impact of the high tariff policy of U.S. President Donald Trump’s administration, a member of the board said, “Even if the impact of U.S. tariff policy becomes pronounced, the expected scale of the impact has become smaller than it was before.” Another member noted, “It can be judged with more certainty that the (BOJ’s 2 pct) price stability target has been more or less achieved.” Many opinions were expressed that a change in monetary policy in the near future would be appropriate. One policymaker said the BOJ “should not miss the timing to raise the policy interest rate, while continuing to provide appropriate information,” and another said, “It may be desirable to raise the policy interest rate sooner, considering the risk of prices in Japan being pushed up significantly through, for example, the yen’s depreciation,” according to the summary. Meanwhile, there were also some opinions that expressed caution about changing monetary policy, citing the fact that the administration of Japanese Prime Minister Sanae Takaichi was only launched on Oct. 21. “It is appropriate to take a little more time to examine the situation,” taking into account that “the direction of the economic policy of Japan’s new administration is not yet fully clear,” a policymaker said. At the meeting, the BOJ’s Policy Board voted seven to two to continue guiding the unsecured overnight call rate to around 0.5 pct. Two members, Hajime Takata and Naoki Tamura, proposed raising the target to around 0.75 pct. Although this proposal was voted down, the summary indicated that discussions about raising the policy interest rate are gaining momentum. END [Copyright The Jiji Press, Ltd.]