BOJ Deputy Governor: "Interest Rate Hike to Be Discussed at Next Week's Meeting"

Himino Ryozo, Deputy Governor of the Bank of Japan (BOJ), announced on the 14th that the decision on whether to raise interest rates will be discussed at the Monetary Policy Meeting scheduled for the 23rd to 24th.

According to the Nihon Keizai Shimbun and others, Deputy Governor Himino stated at a lecture held in Yokohama City, Kanagawa Prefecture, on the same day, "We intend to discuss and decide on the interest rate hike among the policy board members."

Himino Ryozo, Deputy Governor of the Bank of Japan. Photo by Reuters and Yonhap News

Bloomberg News reported that this statement implies that the BOJ is not ruling out an interest rate hike this month, and the market expects a rate increase either in January or March.

Regarding this year's spring labor-management negotiations (Chuntu) wage increases, Deputy Governor Himino expressed a positive outlook, saying, "There were many positive remarks from various sectors at the beginning of the year," and "Reports that continuous wage increases are included in medium-term management plans left an impression." He also mentioned at a press conference that afternoon that the wage increase trend is "relatively proactive compared to the information obtained as of December."

On economic and price trends, he said, "They are generally proceeding according to expectations," and added, "Following last March and July, we will raise the policy interest rate in the future to adjust the degree of monetary easing."

On the 20th, Donald Trump will be inaugurated as the President of the United States. Deputy Governor Himino predicted that the policies of the Trump administration’s second term will impact the economies of various countries, saying, "I expect the broad direction of policies to be revealed in the inauguration speech next week." He also commented on the U.S. economy, stating, "There is a strong view that strong performance will continue for the time being."

The BOJ has kept interest rates unchanged for three consecutive times after deciding to raise the policy rate to 0.25% in July last year. Kyodo News reported that if the BOJ raises the rate to 0.5% this time, it will be the highest level since October 2008.