MNI BRIEF: BOJ Needs To Lift Rate to 1% By 2H FY2025 - Tamura
MNI (TOKYO) - Bank of Japan board member Naoki Tamura said on Thursday that the BOJ needs to raise the policy interest rate to at least 1% by the second half of fiscal 2025, not only to contain upside risk to prices, but to achieve the 2% price target in a stable and sustainable manner.
“I would like to judge the timing of raising the policy rate to 0.75% appropriately. I think even if the policy rate is raised to 0.75%, it is far from the level that will restrict the economy as real interest rates stay at significantly negative zone,” Tamura, a hawkish board member, told business leaders in Matsumoto City.
However, he did not elaborate on when and how the bank would raise the rate.
Tamura also warned that if the policy interest rate stays below the neutral interest rate amid the upside risk to prices, it would boost inflation further.
The BOJ raised the policy interest rate to 0.50% from 0.25% in January. (See MNI BOJ WATCH: Ueda Flags More Hikes, No Clear Timeline)
Tamura at the December policy meeting wanted to raise the rate to 0.50%, but his proposal was voted down by a majority of the board members.