Bank of Japan’s Himino highlights risks of overshooting inflation targets if monetary policy adjustments are postponed.
Bank of Japan Deputy Governor Ryozo Himino cautioned that delaying further policy adjustments could lead to a significant inflation overshoot, following the central bank’s recent rate hike to 1%. The warning underscores a hawkish shift as inflation pressures persist in wholesale and retail markets.
Himino noted that the rapid pass-through of elevated oil prices to consumer goods has maintained upward pressure on inflation. While Middle East tensions have eased, aligning with the BOJ’s April outlook, underlying risks remain. The central bank will monitor the impact of rate hikes on domestic businesses and households.
Despite expectations of continued accommodative financial conditions, Himino stressed the growing danger of falling behind the curve. Failure to act could allow inflation to exceed the 2% target, complicating future policy responses.