BOJ Policymaker Up for Multiple Rate Hikes: April Minutes

Tokyo, June 19 (Jiji Press)–A member of the Bank of Japan Policy Board backed the idea of raising interest rates every few months at their meeting in April, it was learned Friday. At the April 27-28 meeting, three of the nine members proposed a 0.25-percentage-point increase in the uncollateralized overnight call rate, which serves as the central bank’s policy rate, to around 1.0 pct, although the proposal was voted down, the minutes of the meeting disclosed. According to the minutes, one member pointed out that the policy rate “was still some way from the neutral interest rate,” which neither stimulates nor restrains economic activities, and that “it would be necessary for the bank to continue to raise the policy rates at intervals of a few months.” Another member offered the view that the emerging impact of the oil tanker crisis in the Middle East on prices in Japan had made a rate hike at the next meeting in June “quite possible.” On the other hand, some members noted that higher crude oil prices and supply chain constraints, among others, would lead to “further upside risks to prices” and push up the underlying consumer inflation rate “above (the BOJ-targeted) 2 pct.” All members recognized that large-scale disruptions in supply chains, if any, could result in “a significant slowdown in the economy,” the minutes added. At the subsequent two-day Policy Board meeting that ended on Tuesday, the BOJ raised the overnight call rate to around 1.0 pct from around 0.75 pct. END [Copyright The Jiji Press, Ltd.]