Financial News: BoJ's Himino Signals Policy Shift Next Week

BoJ's Himino Signals Policy Shift Next Week

01/14/2025 - 03:44:00 (RTTNews)

(RTTNews) - Bank of Japan Deputy Governor Ryozo Himino said the bank will hike the interest rate if its outlook continues to be realized.

"The developments in prices and inflation expectation, including the economic mechanisms behind them, seem to have been largely on the path," Himino told local business leaders in Kanagawa on Tuesday.

"If this outlook will continue to be realized, the Bank will raise the policy interest rate accordingly and adjust the degree of monetary easing, as it did in March and July last year," the banker added.

However, he cautioned about various risk factors at home and abroad, both upside and downside.

Himino said the bank will pay due attention to the policies of the new US administration and its impact on the Japanese economy. He said the inaugural address next week will give an idea on the broad direction of policies the new administration will pursue.

On the domestic front, the banker observed that the outlook for wage increases in fiscal 2025 would be one of the main issues that should be taken into account. Himino expects strong wage hikes in fiscal 2025.

The BoJ is set to announce its policy decision on January 24. At the December meeting, the bank had left its key interest rate unchanged at 0.25 percent for the third straight session.

The central bank had ended its negative interest rate policy in March 2024 and last lifted the interest rate in July 2024 to 0.25 percent.

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