MNI BRIEF: BOJ Opinions: Neutral Interest Rate Around 1%
At least one Bank of Japan board member emphasised the need to raise the policy interest rate to the estimated 1% neutral rate at the July 30-31 meeting, the summary of opinions showed on Thursday.
Another member said further monetary adjustment will be necessary should the Bank confirm positive corporate behaviour, such as solid business fixed investment, sustained wage hikes and a continued pass-through of cost increases.
Other members also saw the need to adjust the degree of easy policy but there was no view that the BOJ should hurry to raise the interest rate.
“Upward pressure on prices is likely to remain because of tight labor market conditions and the effects of the upper limits on working hours, in addition to the rise in import prices due to inflation overseas and the past depreciation of the yen,” a different member said.
Concern over the near-future rate hike was alleviated sharply by BOJ Deputy Governor Shinichi Uchida who said on Wednesday that the Bank will not raise its policy interest rate when financial markets are unstable.