02.09.202503:46:23UTC+00BoJ to Press On With Policy Normalization: Deputy Governor Himino

Bank of Japan Deputy Governor Ryozo Himino emphasized the appropriateness of Japan continuing to raise interest rates in accordance with economic and price improvements. Addressing business leaders in Kushiro, Himino acknowledged that "risk and uncertainty are perpetual challenges for policymakers." Despite having implemented three rate hikes thus far, real interest rates remain unusually low due to persistent inflation. Himino highlighted the necessity of "continuously evaluating the balance of risks, both potential and adverse, and responding promptly and suitably" to mitigate impact should conditions evolve. Regarding the reduction of government bond purchases, he remarked that a central bank's balance sheet influences the economy through both its assets and liabilities. Any changes, he suggested, should adhere to the principle that long-term interest rates are determined by market conditions, with authorities ensuring predictability while maintaining flexibility to preserve stability.