BOJ Policymaker Urges One Rate Hike Every Few Months: Minutes

Tokyo, Dec. 29 (Jiji Press)–A Bank of Japan policymaker called for raising interest rates “with intervals of a few months” at the central bank’s latest policy-setting meeting this month, according to a summary of opinions at the meeting released on Monday. The summary also included a view that the BOJ’s policy interest rate is “too low relative to the inflation rate” to curb the weakening yen and rising government bond yields. At the Dec. 18-19 meeting, the BOJ Policy Board voted to raise its policy rate to 0.75 pct from 0.50 pct. Many Policy Board members said that it was appropriate to raise the policy rate at the meeting, according to the summary. One member said: “Corporate profits have been solid enough to support wage hikes, and…inflationary pressure is likely to continue if current financial conditions are maintained. Therefore, waiting until the next MPM (monetary policy meeting) entails considerable risk.” Meanwhile, another opinion stated that it is difficult to “identify in advance the neutral interest rate level,” which neither stimulates nor restrains the economy, so “it should be interpreted with considerable latitude.” A representative from the Finance Ministry urged the BOJ to “carefully examine factors such as the impact of the change in the policy interest rate” on economic activity and prices and to “closely exchange views with the government.” END [Copyright The Jiji Press, Ltd.]