MNI BRIEF: BOJ To Watch Markets Vigilantly - Takata

MNI (TOKYO) - Bank of Japan board member Hajime Takata said on Thursday that the BOJ will raise the policy interest rate further if prices move in line with forecasts and solid capital investment and pass-through of cost increases are confirmed.

However, Takata downplayed an imminent rate hike, saying the BOJ must monitor evolving market and economic conditions. “Developments of overseas economies following the rate hikes are the risk factor and the BOJ needs to monitor evolving conditions with high vigilance,” Takata told business leaders in Kanazawa City. “The BOJ must carefully monitor the impact of volatile stock and foreign exchange markets on economy and prices for the time being with the utmost vigilance.”

Takata also said the Bank will not raise the policy rate with a certain neutral level in mind. Takata supported the idea that the bank will take time to raise the rates, while examining the impact of hikes on the economy, prices and financial conditions each time. (See MNI POLICY: BOJ Set For Sept Pause, Rate Hike Path Intact)