INTERVIEW: Environment Prepared for BOJ Rate Hike

Tokyo, Nov. 22 (Jiji Press)–Bank of Japan policymaker Kazuyuki Masu has offered his view that “the environment has already been prepared” for an additional interest rate hike by the BOJ in light of the economic and price conditions. The initial momentum of next year’s “shunto” spring labor-management wage negotiations, a key factor for the central bank’s possible rate hike decision, is expected to appear “earlier than March,” he said in an interview. Masu, a member of the BOJ’s Policy Board, thus suggested that the bank may consider raising interest rates at its monetary policy meetings next month or in January 2026, without waiting until March, when the shunto talks are expected to be concluded at many large companies. “A rate hike would be part of policy normalization, not credit tightening,” after the BOJ continued massive monetary easing for a long period of time, Masu suggested. As to the BOJ’s next policymaking meeting on Dec. 18-19, he said the bank will make a “comprehensive judgment” on whether to raise its policy interest rate while pointing out, “We would have to consider (refraining from a hike) if particularly bad data come out.” Masu stated that the rate of wage hikes in the upcoming shunto will likely be around the level in this year’s negotiations on the back of robust corporate earnings and labor shortages. BOJ Governor Kazuo Ueda told a news conference Oct. 30, held after the last BOJ policy meeting, that he wants to confirm “the initial momentum” of the 2026 shunto to decide whether to raise interest rates, noting, “I don’t think we have to examine the full results of the wage negotiations.” At the BOJ’s policy-setting meetings in September and October, two of the Policy Board’s nine members proposed raising the central bank’s target for the unsecured overnight call rate, the country’s benchmark short-term interbank lending rate, to around 0.75 pct from around 0.5 pct at present. But the proposals were turned down. The BOJ last raised the target in January this year, to the current level from around 0.25 pct. END [Copyright The Jiji Press, Ltd.]