MNI BRIEF: BOJ's Tamura See Higher Rate; No Timeframe

The Bank of Japan will continue raising policy interest rates to adjust the degree of monetary easing, said Board Member Naoki Tamura Friday, without committing to a specific timeframe.

“As for the future conduct of monetary policy, given that real interest rates are at significantly low levels, if the outlook for economic activity and prices presented in the January Outlook Report is realised, the Bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate and adjust the degree of monetary accommodation,” Tamura, the BOJ’s most hawkish member, told business leaders in Yokohama.

He added that inflation appears to be becoming more “endogenous and sticky,” reflecting the Bank’s targeted mechanism in which wages and prices rise interactively.

“Underlying CPI inflation has recently reached approximately 2%, and I believe it is quite possible that, as early as this spring, the price stability target of 2% can be judged to have been achieved if it is confirmed with a high degree of certainty that wage growth in 2026 will be in line with the price stability target for the third consecutive year,” Tamura said.

The board member noted that the BOJ will carefully assess whether inflation remains on track without further upward deviation, to ensure a sustainable achievement of its 2% price stability goal.

Tamura also highlighted risks from the weak yen, cautioning that “domestic consumer prices have become more susceptible to the yen’s depreciation through import prices,” and that future price developments warrant attention as the currency trends downward.