Ryozo Himino, Deputy Governor of the Bank of Japan, stated that there is no change in the policy of raising the benchmark interest rate, despite the worsening situation in the Middle East following airstrikes by the United States and Israel on Iran.
An employee at the Seoul Hana Bank Counterfeit Response Center is holding Japanese yen. Photo by Yonhap News.
According to Kyodo News, Deputy Governor Himino said during a press conference held on March 2 in Wakayama City, western Honshu, that there is "no change in the policy itself" regarding the stance of raising interest rates amid the rapidly changing situation in the Middle East.
However, Deputy Governor Himino did not specify when the next interest rate hike would occur. Some in the financial markets speculate that the Bank of Japan could raise rates as early as April.
Deputy Governor Himino's remarks hinting at a rate hike on this day drew particular attention, as they came amid growing international instability and Prime Minister Sanae Takaichi's nomination of two dovish figures, who favor monetary easing, to the Bank of Japan's Policy Board.
Kyodo News commented, "Crude oil prices and stock markets are seeing significant fluctuations due to the United States and Israel's attack on Iran," and explained, "It is common for the Bank of Japan to avoid policy changes in order to observe the impact, but Deputy Governor Himino explained that changes could occur."
NHK analyzed that while the announcement that 'dovish' figures will be appointed as new Policy Board members at the Bank of Japan led to speculation that a rate hike would be delayed, Deputy Governor Himino reaffirmed the Bank's existing stance of pursuing an interest rate increase.
In his lecture in Wakayama City on the same day, Deputy Governor Himino also stated that the financial environment remains accommodative, even after the Bank of Japan raised its short-term policy rate from "around 0.5%" to "around 0.75%" in December last year.
Regarding the impact of the Middle East situation on the Japanese economy, Deputy Governor Himino said, "We intend to closely monitor the situation while exchanging information closely with the government."
He also expressed the view that U.S. President Donald Trump's imposition of new global tariffs following a ruling that reciprocal tariffs are unlawful would not have a significant enough impact to alter the Japanese economic scenario.
The Trump administration previously imposed a 15% reciprocal tariff on Japanese products, and the current global tariff stands at 10%. President Trump has signaled that he intends to raise the global tariff to 15% in the future.
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