Masai Takako, a former member of the Bank of Japan\’s policy committee, believes that if economic conditions remain roughly unchanged, the Bank of Japan may raise its benchmark interest rate to 0.5% before the end of the year.
Masai said in an interview on Monday: It really depends on the real economy. But if the economic expectations remain at the current level, I think it is okay to raise interest rates one or two times. The final increase in interest rates will be around 0.5%.
Masai said that due to rising prices over the past two years, the inflation expectations of businesses and households have changed.
The Bank of Japan wants to make sure everything is normal. But at the same time they have to deal with the side effects, namely a weaker yen, she said.
On the bright side, the company has good performance and has sufficient ability to invest for the future.
She said that the Bank of Japan needs to strengthen communication on the yen issue and remain vigilant about its possible impact on consumption.
Masai served on the Bank of Japan\’s Board of Governors for five years until June 2021.
Data released last Friday showed that Japan\’s inflation cooled for the second consecutive month in April. Consumer prices excluding fresh food rose by 2.2%.
The indicator topped the Bank of Japan\’s 2% price target for the 25th consecutive month.
Masai said that based on recent communications from the Bank of Japan, including summaries of opinions from recent policy meetings and leadership comments, the authorities appear to be focusing on further steepening the government bond yield curve.
She said it was still difficult to judge the Bank of Japan\’s exact assessment of the economic impact of a weak yen.
Former Bank of Japan official predicts that interest rates may be raised to 0.5% before the end of the year
Masai Takako, a former member of the Bank of Japan’s policy committee, believes that if economic conditions remain broadly unchanged, the Bank of Japan may raise its benchmark interest rate to 0.5% before the end of the year.
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