Tokyo, Nov. 10 (Jiji Press)–Some policymakers at the Bank of Japan called for an early interest rate hike at its latest policy-setting meeting late last month, according to a summary of opinions released by the bank Tuesday. At the Oct. 29-30 meeting, the BOJ’s Policy Board recognized that Japan’s underlying inflation, excluding temporary factors, has reached the central bank’s target of 2 pct while deciding to keep its policy interest rate unchanged at around 1.25 pct. With underlying consumer price index inflation having reached the target, it is necessary for the bank to bring the policy rate to the neutral rate level, which neither stimulates nor cool the economy, “at an early stage,” a board member said. Some others also called for an early rate hike, with one of them saying that the BOJ “needs to step up the pace” of bringing the policy interest rate to the neutral level as financial conditions remain accommodative, the summary showed. “The perspective of anchoring underlying CPI inflation at around 2 pct becomes important,” one member said. The member added, “For the time being, the outcome of next year’s annual spring labor-management wage negotiations warrants attention,” underlining the need to closely monitor wage hike trends at companies in the nation. Another said the year-on-year rate of increase in the core CPI, which excludes fresh food prices, is projected to exceed 3 pct toward the end of the current fiscal year through March 2027. Meanwhile, a different member warned that it is “necessary to pay due attention to the risk” of a future policy interest rate hike weighing on the economy and pushing down underlying CPI inflation. The BOJ raised the policy rate to the current level in September, three months after a hike of 0.25 percentage point to around 1 pct in June. At the October meeting, the Policy Board also decided to boost sales of exchange-traded funds that the central bank bought under its previous massive monetary easing regime, to 860 billion yen a year on a book value basis from 330 billion yen, starting in January 2027. One board member said that it is “appropriate” for the bank to boost the pace of ETF sales “at this juncture” because trading value on the stock market has been expanding, according to the summary. END [Copyright The Jiji Press, Ltd.]
