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- BoJ’s Tamura: Not saying that the neutral rate should be 1%
BoJ’s Tamura: Not saying that the neutral rate should be 1%
Bank of Japan (BoJ) board member Naoki Tamura is back on the wires, via Reuters, clarifying his earlier remarks on the central bank’s interest rate.
Key quotes
Not saying that neutral rate should be 1%.
Difficult to specify terminal rate at this point.
Will try to find where neutral rate should be while examining how economy prices respond to rate hikes.
Upward risks for prices is gradually increasing.
Would be good if terminal rate stands around neutral rate in the latter half of next fiscal year.
No preset idea about the pace of interest rate hikes.
While keeping neutral interest rate of 1% in mind, will raise interest rates in stages in line with the likelihood of achieving inflation target.
Pace of interest rate hikes may not necessarily be once half a year.
Not placing focus on the fact that the policy rate of 0.75% has not been experienced in the past 30 years.
Not necessarily moving forward when inflation target would be achieved, but the range has been narrowed.
Tamura said earlier this Thursday that the central bank must raise rates to approximately 1% by the latter half of fiscal 2025.
Market reaction
USD/JPY is recovering further ground on these above comments. At press time, the pair is losing 0.14% on the day to trade near 152.35.
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