The Bank of Japan needs to raise interest rates every few months and should quicken the pace in the face of stronger upside inflation risks, Naoki Tamura, one of the most hawkish board members, has said.
“What I envisage as a baseline path is raising the interest rate by a quarter percentage point at intervals of a few months toward the neutral interest rate level of 2%,” Tamura said in a speech Thursday at a meeting with local businesses in Hyogo Prefecture.
Tamura is a widely known hawk on the board who frequently calls for raising interest rates to a more normal setting. While his remarks suggest a possibility of another rate hike earlier than most BOJ watchers expect, they also indicate he’s unlikely to follow up last week’s increase with another in July provided no imminent danger of upside inflation momentum.
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