MNI BRIEF: Cautious Policy Adjustments Eyed - BOJ's Nakagawa
MNI (TOKYO) - Bank of Japan board member Junko Nakagawa said on Wednesday that the BOJ will adjust the degree of easy policy if the economy realises the bank’s forecast for economy and prices as real interest rates remain at considerably low levels.
However, Nakagawa in speech to business leaders in Akita City, added the BOJ needs to assess and judge rate hikes cautiously, taking the impact of volatile markets on economy and prices into consideration.
She also pointed out the three risks facing the Japanese economy and prices, such as the inflationary pressure, the downside risk to overseas economies and the risk that a delay of consumer sentiment improvement will impede the positive mechanism from income to spending.
However, Nakagawa maintained the view that the underlying inflation is expected to be a level that is consistent with the bank’s 2% target in the second half of the projection period to March 2027. (See MNI POLICY: BOJ Examines Upping Pace Of Hikes)