By Megumi Fujikawa
Bank of Japan policy board member Naoki Tamura said Thursday that the bank should raise interest rates to 1% or higher in the fiscal half that starts in October 2025.
"Raising short-term interest rates to at least around 1% in the latter half of fiscal 2025 is necessary to reduce upside risk to prices and achieve the price stability target in a sustainable and stable manner," Tamura said in a speech to business leaders in Nagano prefecture in central Japan.
Tamura is a former executive at Sumitomo Mitsui Financial Group and considered hawkish. He proposed a rate increase in December, saying that upside risks to prices have heightened. The proposal was defeated by a majority vote, but the policy board decided to lift interest rates to 0.5% from 0.25% at its January meeting.
Many economists expect the BOJ to raise the policy rate again later this year, but some have cautioned that the next one would require more careful consideration because rates are approaching territory Japan hasn't experienced in the past 30 years.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
February 05, 2025 21:13 ET (02:13 GMT)
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