BOJ Policymaker Koeda Seeks to Raise Interest Rates

Tokyo, Nov. 20 (Jiji Press)–The Bank of Japan should raise interest rates to avoid future distortions as rates are currently significantly low, BOJ policymaker Junko Koeda said on Thursday. The central bank “needs to proceed with interest rate normalization” from significantly low levels “to avoid creating unintended distortions in the future,” Koeda, a member of the BOJ’s Policy Board, said in a speech in Niigata, a city in central Japan. She said the country’s inflation-adjusted real interest rates are negative and “at clearly low levels relative to other economies.” “Even if the negative range of the real interest rate narrows slightly, I believe that it is highly likely that financial conditions will continue to be accommodative, thereby continuing to stimulate consumption and investment,” Koeda said. She also said that the country’s underlying inflation is around the BOJ’s target of 2 pct. END [Copyright The Jiji Press, Ltd.]