BOJ policymaker called for keeping rate-hike stance, May meeting summary shows

TOKYO – The Bank of Japan should not turn overly pessimistic about the economic outlook and stand ready to raise interest rates further depending on shifts in US trade policy, one of its board members was quoted as saying at a April 30-May 1 policy meeting.

“The BOJ will enter a temporary pause in rate hikes due to slowing US growth. But it shouldn’t be too pessimistic, and must conduct monetary policy in a nimble and flexible manner such as by resuming rate hikes in response to changes in US policy,” the member said, according to a summary of opinions released on Tuesday.

Another opinion said the BOJ’s policy path “may change at any time” because the outlook for Japan’s economy and prices could quickly turn positive or negative depending on developments surrounding US tariffs.

“There’s no change to the BOJ’s rate-hike stance as our projection shows inflation achieving our 2% target and real interest rates are deeply negative,” a third opinion showed.

At the April 30-May 1 meeting, the BOJ kept interest rates steady at 0.5% and sharply cut its growth forecasts, suggesting uncertainty surrounding US tariffs and the hit to exports could keep policy in a holding pattern for some time.

(Reporting by Leika Kihara; Editing by Sonali Paul & Shri Navaratnam)