BOJ policymaker suggests rate hike pause amid tariff uncertainties
"I believe that the bank is currently only pausing its policy interest rate hike cycle and should continue to make a gear shift after a certain period of 'wait and see,'" Hajime Takata, a hawkish member, said in a speech in Tsu, Mie Prefecture.
Takata's remarks came days after U.S. President Donald Trump threatened to impose even higher tariffs on Japanese products, with bilateral trade negotiations stalled.
With Trump's trade policy expected to weigh on Japan's export-driven economy, the BOJ kept its benchmark interest rate unchanged at around 0.5 percent in the latest policy meeting last month, marking the third straight gathering without an adjustment.
Given that uncertainties "remain high," Takata said, the BOJ may need to "nimbly" shift back to rate hikes depending on policy changes in the United States and take action if there is increased downward pressure on the economy.
The BOJ has raised its key rate three times since March last year, when it carried out its first hike in 17 years as part of normalization efforts following a decade of unorthodox easing.
Takata also said the central bank should "gradually and cautiously" normalize monetary policy, based on the recognition that it has finally reached the point of returning from unconventional measures to policy conduct for normal times.
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