{"id":13319,"date":"2025-06-25T11:03:13","date_gmt":"2025-06-25T11:03:13","guid":{"rendered":"https:\/\/www.europesays.com\/us\/13319\/"},"modified":"2025-06-25T11:03:13","modified_gmt":"2025-06-25T11:03:13","slug":"most-hawkish-boj-member-flags-rate-hike-risk-as-inflation-gains","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/13319\/","title":{"rendered":"Most Hawkish BOJ Member Flags Rate Hike Risk as Inflation Gains"},"content":{"rendered":"\n

(Bloomberg) \u2014 The Bank of Japan’s (8301.T<\/a>) most hawkish member said it may be necessary to raise interest rates should inflation risks rise even if economic uncertainty lingers.<\/p>\n

Most Read from Bloomberg<\/p>\n

\u201cWhen the likelihood of achieving the price stability target increases, or when upside risks to prices grow, I believe that the bank may face a situation where it should act decisively, despite heightened uncertainties,\u201d Naoki Tamura said Wednesday in a speech to local business leaders in the northeast city of Fukushima.<\/p>\n

He spoke soon after the release of a summary of opinions from the BOJ\u2019s policy meeting last week. The brief record showed policymakers saw little need to rush on their next rate hike along with a broadening view that price gains have been stronger than expected, indicating a chance the central bank could revise up its inflation forecasts at next month\u2019s policy meeting.<\/p>\n

The BOJ is waiting to see the impact of US tariff measures and how trade negotiations between Japan and the US play out, and has cited \u201cextremely\u201d high uncertainty ahead in recent communications. Tamura said he doesn\u2019t expect the situation will be \u201centirely cleared up.\u201d<\/p>\n

Speaking to reporters in the afternoon, Tamura said it\u2019s unlikely the bank would raise rates while the trade talks are still underway, although the chance of a hike isn\u2019t zero if authorities fear they face the risk of falling behind the curve to address inflation.<\/p>\n

\u201cThere is a possibility,\u201d Tamura said. \u201cBut the likelihood isn\u2019t that high in reality for upside prices risks to rise so much when the talks are underway.\u201d<\/p>\n

Tamura\u2019s remarks in the morning helped strengthen the yen against the US dollar temporarily as they suggested the central bank could move earlier on rates than a majority of traders expect. In the afternoon, his comments weakened the yen as they suggested no imminent policy action.<\/p>\n

Tamura has been a consistent hawk, and at the December 2024 meeting at which the BOJ held rates steady he was the lone dissenter in favor of a hike. Governor Kazuo Ueda\u2019s board raised borrowing costs to 0.5% at the following meeting in January.<\/p>\n

On Wednesday Tamura said that recent inflation data have been stronger than expected. Japan\u2019s key price measure hit a fresh two-year high in May, leaving the Asian nation with the fastest price gains among Group of Seven economies.<\/p>\n

Story Continues <\/p>\n

In a February speech, Tamura, a former senior executive at Sumitomo Mitsui Financial Group (SMFG<\/a>), said he estimates that Japan\u2019s neutral rate is at least around 1% and that borrowing costs need to be set around that level when the inflation target is met.<\/p>\n

The central bank currently expects to meet its sustainable inflation goal around the second half of a three-year projection period ending in March 2028. Tamura flagged the possibility it may happen sooner.<\/p>\n

\u201cI believe there is a good possibility that the price stability target will be achieved earlier than expected,\u201d Tamura said.<\/p>\n

Traders are pricing in around a 30% chance of a rate hike by the October meeting and a more than 70% probability of an increase by year-end, according to overnight index swaps.<\/p>\n

(Updates with comments from Tamura\u2019s afternoon press conference from the sixth paragraph.)<\/p>\n

Most Read from Bloomberg Businessweek<\/p>\n

\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) \u2014 The Bank of Japan’s (8301.T) most hawkish member said it may be necessary to raise interest…\n","protected":false},"author":3,"featured_media":13320,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[6238,3638,64,5189,79,14035,14034,67,132,68],"class_list":{"0":"post-13319","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bank-of-japan","9":"tag-bloomberg","10":"tag-business","11":"tag-economic-uncertainty","12":"tag-economy","13":"tag-inflation-risks","14":"tag-naoki-tamura","15":"tag-united-states","16":"tag-unitedstates","17":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114743673220443011","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/13319","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=13319"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/13319\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/13320"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=13319"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=13319"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=13319"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}