Bank of Japan board member Asahi Noguchi said Thursday the pace of future rate hikes would likely be much slower than those of its global peers in recent tightenings, as the impact of rising domestic wages has yet be fully passed on into prices.
"With regard to the pace of policy rate adjustment, it is expected to be slow, at a pace that cannot be compared to that of other major central banks in recent years," Noguchi said in the text of a speech posted on the BOJ's website.
"This is because ... it would take a reasonable amount of time to reach a situation where prices continue to rise at around 2% as a trend," he said in the speech, which was delivered to business leaders in the southwestern city of Saga.
The BOJ ended eight years of negative interest rates and other remnants of its unorthodox policy last month, making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.
Investors are looking for any clues on how soon the central bank will raise short-term interest rates again from the current 0% to 0.1% range, with bets on the timing ranging between from July to the final quarter of this year.
A former academic known for his dovish policy views, Noguchi was among two dissenters on the BOJ's nine-member board in the decision last month to end eight years of negative interest rates.
Noguchi said Japan is now seeing unprecedented wage hikes but that those increases by themselves would not be powerful enough yet to drive up prices and allow trend inflation to reach 2%.
"It is essential for the BOJ to maintain its ultraloose monetary policy to seek an appropriate balance in the labor supply-demand," he said.