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11h ago

BOJ Hawk Tamura Urges Gradual Hikes Toward Neutral Before Oct. 29–30 Decision

The IMF calls for very cautious tightening given trade and political risks, with yen-driven price pressures complicating policy.

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The Japanese national flag waves at the Bank of Japan building in Tokyo, Japan March 18, 2024. REUTERS/Kim Kyung-Hoon/File Photo
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Overview

  • BOJ board member Naoki Tamura said rates should move closer to a neutral level near 1% and advocated a gradual path to avoid sharper hikes later.
  • He argued the current 0.5% policy rate is far from neutral and has had limited impact on growth, citing mounting upside risks to inflation.
  • Tamura voted for a hike in September and proposed 0.75%, and his latest remarks signal he may press the case again at the Oct. 29–30 meeting.
  • The IMF urged the BOJ to keep policy loose and raise rates very gradually due to uncertainty over global trade, domestic politics, and wage sustainability.
  • U.S. Treasury Secretary Scott Bessent said the yen will find its own level if the BOJ follows proper policy, as sticky food prices and a weak currency complicate timing.