BOJ Review Board Member: Interest Rate Must Be Raised to at Least 1% by March Next Year

Soaring Yen Value... Dollar-Yen Drops to the 151 Yen Level
Timing Moved Up from Previous "Second Half of 2026" Position

On October 30 last year, a pedestrian was passing in front of the Bank of Japan (BOJ) located in Tokyo, Japan. Naoki Tamura, a BOJ Policy Board member, stated on the 6th that the benchmark interest rate should be raised to 1% by March next year. On the same day, in the Tokyo foreign exchange market, after Tamura's remarks were announced, the dollar-yen exchange rate briefly fell to the 151 yen level, marking the highest value of the yen since December last year. /AFP·Yonhap Photo by AFP

Naoki Tamura, a policy board member of the Bank of Japan (BOJ), Japan's central bank, stated on the 6th that the benchmark interest rate should be raised to 1% by March next year.

According to foreign media reports including Kyodo News and Nihon Keizai Shimbun (Nikkei), Tamura said at a lecture held in Matsumoto City, Nagano Prefecture, "In the latter half of fiscal 2025 (April 2025 to March 2026), it is necessary to raise the interest rate to at least around 1%."

Known as a hawkish figure within the Bank of Japan who favors monetary tightening, he also expressed the view that raising rates to this level is necessary to curb the inflationary trend.

The Bank of Japan ended its negative interest rate policy by raising rates for the first time in 17 years at the Monetary Policy Meeting in March last year, and last month raised the rate from around 0.25% to around 0.5%.

Regarding the timing of raising the BOJ's interest rate to 0.75%, Tamura said, "I want to make an appropriate judgment," without specifying clearly. However, he emphasized that even if the interest rate reaches around 0.75%, the real interest rate would still be negative.

Nikkei noted that in a lecture last September, Tamura mentioned the timing for the interest rate to reach at least 1% as the latter half of fiscal 2026, analyzing that "this time, he seems to have brought forward his expected timing for the rate hike."

On the same day, in the Tokyo foreign exchange market, following Tamura's remarks, the dollar-yen exchange rate briefly fell to the 151 yen level, marking the highest yen value since December last year. The dollar-yen rate dropped to 151.82 yen around 10:40 a.m. However, as of 3:21 p.m. on the 6th, it recovered to 152.4530 yen, returning to previous levels.