BOJ's Ryozo Himino: Stick to Rate Hikes, Adjust Monetary Support Based on Economy, Prices

Bank of Japan Deputy Governor Ryozo Himino on Thursday made a clear statement on the monetary policy path, emphasizing that the central bank should stick to its rate-hike direction while flexibly adjusting monetary support in line with economic, price, and financial trends.

**Clear Rate-Hike Stance, Pace Dependent on Data**

Himino said the BOJ will raise interest rates if the economy and prices develop as expected. He also noted that the central bank will continue to support the economy through accommodative monetary conditions, implying that the policy normalization process is not an abrupt brake but a gradual advance while maintaining a certain easing bias. This aligns with the BOJ's previous path of gradually exiting its ultra-loose policy.

**External Risks Taken into Account**

When discussing risk factors, Himino mentioned that the BOJ's economic outlook could change depending on the situation in the Middle East, and that policy adjustments would be made based on monitoring the impact of Middle East developments on Japan's economy. This indicates that geopolitical uncertainty has become a key variable in the BOJ's assessment of rate-hike timing, rather than relying solely on domestic inflation and wage data.

**Policy Stance Moving Toward Neutrality**

According to market sources, Himino has also previously stated that the BOJ's policy remains somewhat accommodative but should gradually shift toward a more neutral stance through appropriate policy rate hikes. This assessment echoes his latest "stick to rate hikes" remarks, showing that the BOJ's leadership is seeking a balance between supporting the economy and advancing normalization.