FX.co ★ BoJ Takata Renews Push for Rate Rise

Bank of Japan policy board member Hajime Takata reiterated his recommendation for an interest rate increase, citing alleviated tariff concerns and advancements towards the central bank’s inflation objective. In a speech on Monday, he noted that "headline inflation has remained at 2% or above for three and a half years," suggesting that "now is an ideal time to elevate the policy interest rate." Previously, Takata suggested raising the rate from 0.5% to 0.75%, a proposal that was turned down in September. He asserted that Japan's economy is approaching its price stability target, enhancing the possibility that he will advocate for a rate hike at the upcoming meeting on October 29–30. Takata also mitigated fears of a potential economic downturn in the United States, highlighting strong household, corporate, and financial sector balance sheets. He observed that the Federal Reserve’s rate cut in September did not lead to an unfavorable appreciation of the yen, and that U.S. tariffs have not deterred Japanese companies from making investments in equipment and wages.