BOJ to Continue Rate Hikes: Deputy Gov. Uchida

Tokyo, June 16 (Jiji Press)–Bank of Japan Deputy Governor Shinichi Uchida said Tuesday that the central bank will continue to raise its policy interest rate in line with economic and price conditions. Uchida was speaking at a press conference on behalf of BOJ Governor Kazuo Ueda, who is currently hospitalized for treatment of a liver cyst infection, after the BOJ’s Policy Board voted earlier in the day to raise the policy rate from around 0.75 pct to around 1 pct, a level unseen in 31 years. The deputy head explained that the risk of a significant economic slowdown has decreased thanks to progress in procuring raw materials from alternative sources amid the current turmoil in the Middle East, while underlying inflation in consumer prices could rise above the bank’s 2 pct inflation target. He welcomed the U.S.-Iran agreement to end their fighting as a “desirable move,” but added that uncertainties remain, including the pace of recovery in logistics. Uchida noted that the monetary environment will remain accommodative even after the latest rate increase. He added that the BOJ will manage monetary policy appropriately to avoid falling behind the curve. Regarding the BOJ’s decision to stop reducing its Japanese government bond purchases next April and set the monthly purchase amount at around 2 trillion yen, the deputy governor said that the bank may review the measure as needed. END [Copyright The Jiji Press, Ltd.]