Bank of Japan (BOJ) board member Naoki Tamura expressed support for raising the policy rate to at least around 1% by the second half of this fiscal year in order to reach the central bank’s long-term inflation goals. Speaking to business leaders in Nagano on Thursday, Tamura emphasized that the neutral rate should be no lower than 1%. He noted that with the current rate set at 0.75%, it remains well below the neutral level and still negative in real terms, which would not sufficiently curb inflationary pressures or slow the economy.
Following the remarks, the Japanese yen saw a sharp rise, strengthening to 151.82 against the U.S. dollar. Tamura, often considered the most hawkish member of the BOJ board, underlined the need for monetary tightening to achieve sustainable, stable inflation levels in the coming months.
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