Naoki Tamura signals potential acceleration of rate increases if inflation risks materialize above the 2% target.
Bank of Japan board member Naoki Tamura stated the central bank has met its 2% inflation target and should raise rates near neutral to prevent overshooting. He emphasized the need to assess the neutral rate’s impact on the economy and prices with each hike.
Tamura noted that FX movements, influenced by multiple factors, now have a larger effect on inflation due to shifts in corporate pricing behavior. He suggested the pace of rate hikes—whether quarterly or otherwise—would depend on economic and market responses.
The USD/JPY pair edged 0.02% lower to 161.75 following the remarks.