Bank of Japan’s Tamura
- BOJ should push rates closer toward levels deemed neutral
- Growth rate of Japan’s economy is likely to rise, with overseas economies returning to a moderate growth path
- Don’t need to raise rates sharply, tighten monetary policy now when there are both upside, downside risks
- My view is that there is a strong possibility that the slowdown in overseas economies will not be as significant as initially expected
- Given upside price risks, BOJ should push up rates closer toward neutral to avoid being forced to hike rates sharply in the future
- Inflation may deviate upward from the baseline scenario
- Inflation risk is mounting in Japan
- Many firms appear to be maintaining a proactive fixed investment stance
- Higher food prices should not be regarded as merely a temporary factor, and they require close monitoring
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BOJ policy board member Naoki Tamura meeting with local leaders in Okinawa, Japan.
- He is one of two BoJ policy board members who dissented from the BOJ’s decision to hold policy rates steady at last month’s meeting.
- Both members signaled they believe the central bank is ready for another rate increase
This article was written by Eamonn Sheridan at investinglive.com.