The Bank of Japan will continue to raise its benchmark interest rate to ensure that the price trend doesn’t exceed 2%, board member Kazuyuki Masu has said, in comments that support widespread expectations that the bank will raise borrowing costs next week.
“The Bank will continue to raise the policy interest rate” given a prevailing price trend very close to 2% and financial conditions that remain accommodative, Masu said Thursday in a speech to business leaders in Fukui Prefecture. “What is most vital from now on is to ensure that the underlying inflation rate does not significantly exceed 2%.”
Masu’s remarks indicate that the BOJ won’t be finished with tightening its settings even as the policy rate is set to enter the lower range of the estimated neutral level for the first time in the current hiking cycle.
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