BOJ Policymakers Divided on Pace of Rate Hike
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The Bank of Japan (BOJ) remains divided on the appropriate timing for raising interest rates, according to a summary of opinions from its October policy meeting released on Monday, reports Reuters.
Several board members expressed concern about the potential for renewed market volatility if rates are raised too quickly. They emphasized the need to closely monitor market developments, particularly yen movements, to determine if the Japanese economy can withstand higher borrowing costs.
"It was too early to conclude markets will restore calm," one member stated, highlighting the need for careful scrutiny.
Another member echoed this sentiment, advocating for a cautious approach to rate hikes.
However, other members emphasized the importance of communicating the BOJ's commitment to further rate hikes if its economic and price forecasts are met.
"The Bank should consider further rate hikes after pausing to assess developments in the U.S. economy," one member said, arguing that Japan's economy no longer requires substantial monetary support.
The BOJ maintained its ultra-low interest rate policy at its October 30-31 meeting but signaled that conditions were becoming more favorable for future rate hikes.