BOJ: Tamura States Rates Should Rise To At Least 1% Over Forecast Horizon

BoJ board member Tamura is speaking and coming across with hawkish tones. Notable headlines are outlined below. The remarks made by Tamura today are more hawkish than those made by Nakagawa, albeit at the margin. Tamura's comments helped bring USD/JPY off its earlier highs, although follow through hasn't been that strong (last near 142.50/55, still 0.10% weaker in yen terms for the session). JGB futures are lower at 144.53, -.18 versus settlement levels (earlier lows were at 144.40). 

• "BOJ'S TAMURA: MUST PUSH UP SHORT-TERM RATES AT LEAST TO AROUND 1% BY LATTER HALF OF OUR LONG-TERM FORECAST PERIOD THROUGH FISCAL 2026, TO STABLY ACHIEVE 2% INFLATION TARGET - [RTRS]
• "*BOJ'S TAMURA: VIEWS NEUTRAL RATE AT LEVEL OF AT LEAST 1%, *TAMURA: TO ADJUST RATE IN ACCORDANCE WITH PRICE GOAL CERTAINTY" - BBG
• "BOJ'S TAMURA: PACE AT WHICH MARKETS EXPECT BOJ TO HIKE RATES IS VERY SLOW, HIKING AT SUCH PACE COULD FURTHER HEIGHTEN UPWARD INFLATION RISK - [RTRS]"
• BOJ'S TAMURA: LIKELIHOOD OF JAPAN SUSTAINABLY ACHIEVING BOJ'S PRICE TARGET HEIGHTENING FURTHER - [RTRS]
• BOJ'S TAMURA: PERSONALLY SEE UPWARD INFLATION RISK HEIGHTENING - [RTRS]"

The remarks on the neutral rate are more concrete compared to other board members, who have kept the notion of where neutral rates might be more vague. Still Tamura also noted that rate rises should happen in several phases, with an eye on how the economy and prices respond. It was also noted financial market volatility must be watched fo its impact on the broader economy. This has been a consistent message from BoJ officials since the early August sell-off.