BoJ Chief Says Rate Hike Will Not Put Brakes On Economy

(RTTNews) - Bank of Japan Governor Kazuo Ueda said the interest rate hikes will not put breaks on economic activity, suggesting that the bank is likely to tighten its monetary policy this month.

"…raising the policy interest rate under accommodative financial conditions is about a process of easing off the accelerator as appropriate toward achieving stable economic growth and price developments, not about applying the brakes on economic activity," he told business leaders in Nagoya.

The bank has kept its uncollateralized overnight call rate unchanged at around 0.5 percent despite inflation continuing to remain above the 2 percent target. The bank had raised the benchmark rate to the current level from 0.25 percent in January.

"At the MPM, the Bank will examine and discuss economic activity and prices at home and abroad as well as developments in financial and capital markets, including the point I just mentioned, based on various data and information, and will consider the pros and cons of raising the policy interest rate and make decisions as appropriate," Ueda said.