Japan May Hit 2 Pct Inflation Target This Spring: BOJ Policymaker

Tokyo, Feb. 13 (Jiji Press)–Bank of Japan policymaker Naoki Tamura said Friday that the central bank’s 2 pct inflation target could be deemed to have been achieved as early as this spring. In a speech in Yokohama, Kanagawa Prefecture, south of Tokyo, Tamura said that the BOJ will implement monetary policy in a “timely and appropriate manner” to ensure stable attainment of the goal, signaling an intent to explore further interest rate hikes. The impact of the BOJ’s rate increases since March 2024 on the Japanese economy “has so far been extremely limited,” Tamura, a member of the central bank’s Policy Board, said. “There is still considerable distance to the neutral interest rate level,” he said of a rate that neither stimulates nor restrains economic growth. Acknowledging the difficulty of pinpointing the neutral rate, he said that the only way to gauge it is to “examine the response of economic activity and prices as the bank raises the policy interest rate.” Tamura also cautioned that “the possibility that the negative effects” of a prolonged period of near-zero rates “may become larger in the future, as further side effects materialize at a later date.” END [Copyright The Jiji Press, Ltd.]