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FUKUOKA (Kyodo) The Bank of Japan may carry out additional interest rate increases this year, BOJ Policy Board member Atsushi Mizuno suggested Wednesday, citing an upbeat outlook for the economy driven by brisk corporate capital spending.

He said it would be a mistake for financial markets to interpret the gradual adjustment of interest rate levels advocated by the BOJ leadership as meaning there will be no additional rate hikes by the end of the year.

Mizuno, considered the most hawkish member of the BOJ’s nine-member Policy Board, said he sees a risk that long-term interest rates may decline despite improvements in economic fundamentals if such a misinterpretation grows among market players.

Speaking to business leaders in Fukuoka, Mizuno said brisk capital investments and higher productivity could lift Japan’s potential growth rate to 2.0 percent to 2.5 percent from the 1.5 percent to 2.0 percent envisaged by the BOJ.

But he repeated the board’s consensus that the central bank will maintain an accommodative monetary environment and raise rates “slowly,” while closely monitoring economic and price developments.

The central bank on July 14 scrapped its “zero-interest-rate” policy, raising the unsecured overnight call money rate to 0.25 percent from zero for the first rate hike in six years.

The symbolic move toward normalizing Japan’s monetary policy stemmed from the bank’s judgment that deflation and a decade-old economic slump have been overcome.

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