Latest news with #inflationTarget
Reuters
03-07-2025
- Business
- Reuters
BOJ policymaker calls for resuming rate hikes after temporary pause
TOKYO, July 3 (Reuters) - The Bank of Japan should resume interest rate hikes following a temporary pause to evaluate the impact of U.S. tariffs, board member Hajime Takata said, signalling optimism the country was on track to durably achieve the central bank's price goal. While the BOJ must take its time scrutinising the fallout from U.S. tariffs, it may need to "nimbly" shift back to rate hikes in response to any changes to U.S. policies, he said. "My view is that the BOJ is currently only pausing its policy interest rate hike cycle, and should continue to make a gear shift (from ultra-loose monetary policy) after a certain period of 'wait and see'", Takata said in a speech on Thursday. "Given uncertainties regarding various U.S. policies remain high, the BOJ must conduct monetary policy in a more flexible manner without being too pessimistic," he said. The remarks by Takata, who is viewed by markets as taking a neutral to slightly hawkish stance on monetary policy, highlight the BOJ's resolve to resume rate hikes once there is more clarity on whether the economy can weather the hit from U.S. tariffs. The BOJ ended a massive stimulus last year and in January raised short-term rates to 0.5%. While the central bank has signalled readiness to raise rates further, the expected impact of U.S. levies forced it to cut its growth forecasts in May. Takata said Japan was close to achieving the BOJ's 2% inflation target with robust corporate profits and labour shortages driving up wages and building price pressures. Medium- and long-term inflation expectations also continue to heighten steadily due not just to rising raw material costs but wage hikes, he said, adding that Japan is finally seeing signs of home-made inflation - a prerequisite for rate hikes. While predicting that such an assessment will remain "broadly" unchanged despite Trump's April 1 announcement of sweeping reciprocal tariffs, Takata said he wanted to scrutinise whether U.S. duties would not derail the economy's momentum towards achieving the BOJ's price target. Specifically, the BOJ must assess whether U.S. tariffs could hurt exports, capital expenditure and corporate appetite to continue wage hikes, he said. If the U.S. Federal Reserve were to cut interest rates to support the economy, the divergence between the BOJ's rate-hike bias and the Fed's easing could push up the yen and hit corporate profits, he added. Takata, however, said the hit to Japan's economy from U.S. tariffs will likely be limited compared with the bilateral trade friction in the 1990s as Trump's levies target a wide range of countries - not just Japan. Japanese companies' robust profits and financial buffers also make its economy more resilient to external shocks than in the 1990s, he added. With firms now more keen to raise prices and wages, Japan is breaking free from a long-held view among society that inflation and wage growth will remain stagnant, Takata said. "Japan's economy ended up experiencing several 'false dawns,' or temporary economic recoveries, interrupted by global demand shocks. My expectation is that Japan will see a 'true dawn' this time," Takata said. "I believe the BOJ should gradually and cautiously shift gears in its monetary policy," based on the view the economy was ready for a full withdrawal of an unconventional easing programme.
Yahoo
03-07-2025
- Business
- Yahoo
BOJ policymaker calls for resuming rate hikes after temporary pause
By Leika Kihara TOKYO (Reuters) -The Bank of Japan should resume interest rate hikes following a temporary pause to evaluate the impact of U.S. tariffs, board member Hajime Takata said, signalling optimism the country was on track to durably achieve the central bank's price goal. While the BOJ must take its time scrutinising the fallout from U.S. tariffs, it may need to "nimbly" shift back to rate hikes in response to any changes to U.S. policies, he said. "My view is that the BOJ is currently only pausing its policy interest rate hike cycle, and should continue to make a gear shift (from ultra-loose monetary policy) after a certain period of 'wait and see'", Takata said in a speech on Thursday. "Given uncertainties regarding various U.S. policies remain high, the BOJ must conduct monetary policy in a more flexible manner without being too pessimistic," he said. The remarks by Takata, who is viewed by markets as taking a neutral to slightly hawkish stance on monetary policy, highlight the BOJ's resolve to resume rate hikes once there is more clarity on whether the economy can weather the hit from U.S. tariffs. The BOJ ended a massive stimulus last year and in January raised short-term rates to 0.5%. While the central bank has signalled readiness to raise rates further, the expected impact of U.S. levies forced it to cut its growth forecasts in May. Takata said Japan was close to achieving the BOJ's 2% inflation target with robust corporate profits and labour shortages driving up wages and building price pressures. Medium- and long-term inflation expectations also continue to heighten steadily due not just to rising raw material costs but wage hikes, he said, adding that Japan is finally seeing signs of home-made inflation - a prerequisite for rate hikes. While predicting that such an assessment will remain "broadly" unchanged despite Trump's April 1 announcement of sweeping reciprocal tariffs, Takata said he wanted to scrutinise whether U.S. duties would not derail the economy's momentum towards achieving the BOJ's price target. Specifically, the BOJ must assess whether U.S. tariffs could hurt exports, capital expenditure and corporate appetite to continue wage hikes, he said. If the U.S. Federal Reserve were to cut interest rates to support the economy, the divergence between the BOJ's rate-hike bias and the Fed's easing could push up the yen and hit corporate profits, he added. Takata, however, said the hit to Japan's economy from U.S. tariffs will likely be limited compared with the bilateral trade friction in the 1990s as Trump's levies target a wide range of countries - not just Japan. Japanese companies' robust profits and financial buffers also make its economy more resilient to external shocks than in the 1990s, he added. With firms now more keen to raise prices and wages, Japan is breaking free from a long-held view among society that inflation and wage growth will remain stagnant, Takata said. "Japan's economy ended up experiencing several 'false dawns,' or temporary economic recoveries, interrupted by global demand shocks. My expectation is that Japan will see a 'true dawn' this time," Takata said. "I believe the BOJ should gradually and cautiously shift gears in its monetary policy," based on the view the economy was ready for a full withdrawal of an unconventional easing programme. Sign in to access your portfolio
Wall Street Journal
25-06-2025
- Business
- Wall Street Journal
BOJ Should Consider Rate Hikes Without Delay, Board Member Tamura Says
The Bank of Japan should consider additional interest-rate hikes without delay, board member Naoki Tamura said, as it could hit its inflation target sooner than expected. 'My basic thinking is that the bank will analyze the data and various information without preconceptions, and will accordingly raise the policy interest rate and adjust the degree of monetary accommodation in a timely and appropriate manner in line with improvements in economic activity and prices, without haste or delay,' he said Wednesday.
Yahoo
06-06-2025
- Business
- Yahoo
Swiss National Bank denies currency manipulation after being put on U.S. watch list
ZURICH (Reuters) -The Swiss National Bank does not engage in currency manipulation, the central bank said on Friday, after the United States added Switzerland to a list of countries being monitored for unfair currency and trade practices. "The SNB does not engage in any manipulation of the Swiss franc," the SNB said after the publication of the U.S. Treasury Report on Thursday. "It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy," it added. The SNB said it remained in contact with U.S. authorities to explain Switzerland's economic situation and monetary policy, and would continue to use interest rates and forex market interventions to pursue its inflation target. The central bank declined to say whether further talks with the United States were planned, but said it acted in the interests of Switzerland, where it aims to keep annual price increases within a band of 0-2%. "Our monetary policy is geared towards the needs of Switzerland," the SNB said.
Reuters
06-06-2025
- Business
- Reuters
Swiss National Bank denies currency manipulation after being put on U.S. watch list
ZURICH, June 6 (Reuters) - The Swiss National Bank does not engage in currency manipulation, the central bank said on Friday, after the United States added Switzerland to a list of countries being monitored for unfair currency and trade practices. "The SNB does not engage in any manipulation of the Swiss franc," the SNB said after the publication of the U.S. Treasury Report on Thursday. "It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy," it added. The SNB said it remained in contact with U.S. authorities to explain Switzerland's economic situation and monetary policy, and would continue to use interest rates and forex market interventions to pursue its inflation target. The central bank declined to say whether further talks with the United States were planned, but said it acted in the interests of Switzerland, where it aims to keep annual price increases within a band of 0-2%. "Our monetary policy is geared towards the needs of Switzerland," the SNB said.
