The Bank of Japan (BoJ) board member Naoki Tamura is back on the wires on Thursday, noting that “don't have a preset idea on the pace of further rate hikes,” when asked whether the BoJ could raise rates again by year-end, or March end of the current fiscal year.
Unlike US and Europe, Japan's rate hikes are likely to be slow.
Exact timing on when Japan can see short-term rates reach 1% will depend on economic, price conditions at the time.
Data out so far show Japan's economy moving in line with forecasts made in BoJ July meeting.
Focusing too much on whether markets are stable or not could prevent BoJ from conducting monetary policy appropriately reflecting economic, price developments.
In long-term perspective, markets move in a way reflecting fundamentals.
Having said that, big, rapid market volatility is undesirable.
When markets are quite fragile, we need to set a period to ensure markets cool down.
Cannot say now whether BoJ could raise rates by end of this year.
Weak yen being reversed somewhat but rise in import costs seen earlier this year will likely affect consumer inflation with a lag.
Compared to when USD/JPY was at 160, upward risk to inflation has subsided somewhat.
BoJ must slowly raise rates in several stages, while closely watching how each rate hike affects economic activity.
These comments fail to move the Japanese Yen, as USD/JPY adds 0.32% on the day to trade near 142.80, as of writing.
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