BOJ to raise interest rates if inflation target reached

Bank of Japan (BOJ) Governor Kazuo Ueda said on March 24 that the BOJ will continue to raise interest rates if its core inflation target can be achieved, despite facing losses from its government bond holdings.

The BOJ will continue to raise interest rates if its core inflation target can be achieved. Illustration photo

“ We have announced that we will continue to adjust the level of monetary easing if core inflation is likely to reach 2 percent ,” Kazuo Ueda told parliament when asked about the impact of the BOJ taking losses from its Japanese government bond holdings.

“ Our policy objective is to achieve price stability. Our pursuit of policies will not be influenced by factors related to the BOJ’s finances ,” he added.

In December 2024, the Bank of Japan released estimates of how future rate hikes could affect bank earnings, and the results showed that the BOJ expects to incur a loss of about 2 trillion yen ($13.3 billion) if short-term borrowing costs rise by 2%.

Asked about the impact of the stock market plunge on the BOJ's ETF holdings, Kazuo Ueda said a 1,000-point drop in Japan's Nikkei 225 would cause a valuation loss of about 1.8 trillion yen.

Last week, the BOJ kept interest rates steady and warned of rising global economic uncertainty, saying the timing of further rate hikes would depend largely on the impact of possible U.S. tariff hikes.

However, Mr Kazuo Ueda also said at the time that rising food costs and stronger-than-expected wage growth could push up core inflation, highlighting the central bank's attention to growing domestic price pressures.

Minh Hien

According to Reuters

Source: https://congthuong.vn/boj-se-tang-lai-suat-neu-dat-muc-tieu-lam-phat-379717.html