BOJ Board Member Calls for Rate Hikes to Counter Inflation

Fukuoka, May 21 (Jiji Press)–The Bank of Japan should raise its policy interest rate at an appropriate pace to counter inflation, Policy Board member Junko Koeda said Thursday. “My view is that underlying inflation is already around (the BOJ’s target of) 2 pct,” Koeda said at a lecture meeting in the southwestern city of Fukuoka. “Given the situation in the Middle East, I see some possibility that underlying inflation may exceed 2 pct looking ahead,” she added. Koeda stated that the recent developments “may have increased the likelihood of a risk scenario in which high crude oil prices persist.” The pace at which companies pass higher costs to buyers “seems to have accelerated compared with a few years ago,” she also said. “Prices could continue to increase across a wider range of items down the road.” It will be “even more important to proceed with interest rate normalization through policy interest rate hikes,” if the potential economic growth rate remains stable, she added. END [Copyright The Jiji Press, Ltd.]