BOJ to Keep Seeking Timing for Interest Rate Hike, Masai Says
(Bloomberg) -- The Bank of Japan will keep seeking the best timing to raise interest rates again as economic conditions continue to improve, according to former BOJ board member Takako Masai.
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The central bank’s survey of business sentiment this week showed positive results for corporate activity with monetary conditions still accommodative, Masai said on Bloomberg TV on Friday.
“It’s really good,” Masai said. “It’s really natural to consider a rate hike for the Bank of Japan.”
Masai spoke as the new government has called for cautious consideration with regards to the timing for the next rate hike. Prime Minister Shigeru Ishiba caused a stir in the markets Wednesday when he declared conditions aren’t ripe for the action for now, later clarifying that he was merely intending to show alignment with Governor Kazuo Ueda.
The BOJ has maintained its stance that its decisions will be data driven and it will proceed with further adjustments to policy settings should its price projections materialize.
The stances between the government and the BOJ strike “a good balance,” Masai said, adding that while the exchange rate has reacted to the remarks over monetary policy, a range for the yen between 140 to the dollar and 150 is comfortable.
The relatively weaker yen with lower volatility is good for the Japanese economy, helping with the nation’s exporters, while a stronger yen eases the burden on consumers by making imports cheaper, said Masai, who currently chairs the SBI Financial and Economic Research Institute Co. She served as a member of the BOJ policy board until 2021.
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