BOJ's Himino Signals Rate Hike After 1.25% Move as Inflation Nears 2%
Updated
Updated · Reuters · Oct 21
BOJ's Himino Signals Rate Hike After 1.25% Move as Inflation Nears 2%
3 articles · Updated · Reuters · Oct 21
Summary
Ryozo Himino said the BOJ is ready to keep raising borrowing costs, arguing that delaying further adjustment could let inflation risks build and hurt the economy later.
Underlying inflation is now quite close to the BOJ's 2% target, he said, while financial conditions remain accommodative even after last month's rate increase, with low real borrowing costs and solid bank lending.
The remarks strengthen market expectations for another hike as soon as December, though the BOJ is still widely expected to leave rates unchanged at its Oct. 30 meeting.
Price pressure is being driven not only by fuel and raw materials but also by strong global AI demand lifting exports and capital spending, adding to concerns that inflation could overshoot.
Fiscal policy remains a complication: Finance Minister Satsuki Katayama acknowledged tax cuts can stoke inflation, while the government weighs winter power and gas subsidies and broader spending plans.