A hawkish Bank of Japan board member, Naoki Tamura, has called for the central bank to raise interest rates at a pace of once every few months to push them towards levels deemed neutral to the economy.
Tamura estimated that Japan’s neutral rate lies somewhere around 2%, which is higher than the BOJ’s current policy rate of 1%.
He expects inflationary pressures to heighten regardless of developments in the Middle East conflict, with the pass-through of recent rises in import prices potentially occurring more quickly than in the past.
Tamura suggested that the policy interest rate should be raised by 0.25 percentage points at intervals of a few months toward the neutral interest rate level of 2%.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
