Forex – Bank of Japan (BOJ) board member Hajime Takata said the BOJ should continue to raise interest rates if companies continue to increase their spending and prices.
“The stock and currency markets experienced major volatility in early August, and the effects are ongoing. Therefore, we need to review market developments and their impacts for now,” Takata said. “If inflation moves roughly in line with assumptions and companies continue to increase spending and prices, and pass on costs through price increases, then we need to further adjust the degree of cash expansion,” he said.
Takata also said that while U.S. and European central banks are considering or moving toward interest rate cuts, the effects of past aggressive fiscal tightening could be delayed and put pressure on Japan’s economy.
Takata said the difference between the monetary policy stances of the BOJ and other central banks could also cause market turbulence, adding, “Therefore, we should carefully monitor domestic and international developments for now.”
