BOJ board turned hawkish in April, many saw need for more rate hikes-summary
TOKYO -Bank of Japan board members turned overwhelmingly hawkish at their April policy meeting with many calling for the need to raise interest rates steadily to forestall risks of an inflation overshoot, a summary of opinions at the meeting showed.
The debate underscores BOJ Governor Kazuo Ueda's recent remarks signalling the chance of multiple rate hikes ahead, and heightens the possibility of an increase in short-term borrowing costs in coming months. Many of the opinions shown in the summary called for the need to raise interest rates steadily, and consider reducing the size of the BOJ's bond purchases sometime in the future.
"If the outlook shown in our April quarterly report is realized, our 2% inflation target will be sustainably and stably achieved in about two years and the output gap will be positive. Therefore, there's a chance our policy interest rate will be higher than the path currently priced in by the market," another opinion showed.
A separate opinion said the BOJ should eventually eliminate its holdings of exchange-traded funds , even if doing so might take a long time, the summary showed. In March, the BOJ ended eight years of negative interest rates and other remnants of its radical stimulus including its bond yield control and purchases of risky assets like ETFs.
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