Real Interest Rates “Very Low” despite Rate Hike: BOJ Ueda

Tokyo, Dec. 19 (Jiji Press)–Japanese real interest rates are “very low” even after the Bank of Japan’s decision to implement its first interest rate hike since January, BOJ Governor Kazuo Ueda said Friday. At a press conference following the BOJ’s policy-setting meeting that ended earlier in the day, Ueda said he expects the current accommodative financial conditions to continue as real interest rates remain in negative territory. The BOJ in its two-day meeting decided to raise its target for the unsecured overnight call rate from around 0.5 pct to around 0.75 pct, a level unseen in about 30 years. Looking ahead, Ueda said that the BOJ will decide the pace of credit tightening as it monitors the economic, financial and price situations. If long-term interest rates make exceptional moves, the BOJ will respond by carrying out market operations flexibly, Ueda said. Following the BOJ’s rate hike decision, the benchmark 10-year Japanese government bond yield, regarded as the country’s key long-term interest rate, shot up to 26-year highs above 2.0 pct. END [Copyright The Jiji Press, Ltd.]