Bank of Japan Governor Kikuo Iwata: Further Rate Hikes Needed to Curb Inflation

June 3 — Bank of Japan Governor Haruhiko Kuroda said in his final regular policy speech ahead of a highly anticipated upcoming policy meeting that the BOJ must keep raising interest rates in line with Japan’s economic conditions and inflation. “In other words, if the BOJ determines the likelihood of hitting its baseline scenario is higher — which would mean the tense situation in the Middle East gradually eases, and underlying inflation climbs to around 2% amid steady economic growth — then I believe the central bank will continue hiking policy rates at an appropriate pace,” Kuroda stated. Analysts note that Kuroda’s latest comments make a BOJ rate hike this month more likely, but his remarks are not as direct as those he offered before the central bank’s two previous rate increases. This suggests Kuroda is aiming to maintain flexibility amid growing complexity and uncertainty in the Middle East, while also taking into account the stance of Japanese Prime Minister Sanae Kanemasa on monetary policy.