O Bank of Japan will continue to increase interest rates if underlying inflation accelerates towards its goal of 2%as projected, said a central bank authority on Wednesday (5).
“Underlying inflation is heading to 2%, but remains below that level today. Thus, we should support economic activity with a loose monetary policy, ”said Kazuhiro Masaki, director-general of the Banco do Japan monetary affairs department to Parliament.
“That said, we will continue to increase the interest rate and adjust the degree of monetary support if underlying inflation accelerates to 2%, as we projected,” he said.
Comments suggest that the Japanese Central Bank is maintaining its determination to constantly increase loan costs, despite the growing uncertainty of US President Donald Trump’s tariff policies, which is increasing market volatility.
The Japan consumer inflation core reached 3.0% in December, marking the fastest annual rhythm in 16 months and exceeding 2% for almost three years.
Banco do Japan raised the short -term interest rate from 0.25% to 0.5% in January, reflecting its conviction that the country is progressing to sustainably achieve its 2% inflation target.
